Oil price hike hits transport, electricity, food worst

A MASSIVE, historic fuel price hike hits the country this week, and analysts said households should brace for the impact of expensive fuel on transport, food and electricity.

- By LENIE LECTURA AND ANDREA E. SAN JUAN

However, the double-digit pump price hike will be implemented on a staggered basis, with most oil firms adjusting their pump prices from three days to seven days, to temper the impact.

Still, it is expected to hit hard. With global crude oil prices surging past the $100 per barrel level, Filipino consumers and households should cut "non-urgent spending," manage electricity use, plan transport carefully, avoid new high-interest debt, and keep a "modest" stock of basic goods as higher fuel costs are now expected to spill over into transport, food, and electricity, according to analysts.

Ruben Carlo Asuncion, Chief Economist at UnionBank of the Philippines, told the BusinessMirror that households should expect higher transport fares, rising food costs, and more expensive electricity.

Based on an initial list released by the Department of Energy (DOE) on Monday, diesel price

will increase anywhere from a P17.5 per liter to as high as P24.25 per liter. Gasoline price increase ranges from P8.75 per liter to P13 per liter. Kerosene prices will shoot up anywhere from P32 per liter to P38.5 per liter. The new pump prices take effect starting March 10.

The resulting pump price for diesel will reach anywhere from as low as P60.5 per liter to as high as P63.19 per liter. Gasoline prices will be sold anywhere from P52.10 per liter to P60.40 per liter. Kerosene will be sold at an average of P86.67 per liter.

The price hike on petroleum products will be implemented gradually after the DOE and oil companies reached an agreement to stagger effectivity of the hikes, so that consumers will not suddenly feel the impact of the Middle East situation on oil prices.