If you noticed, the prices of fuel have been gradually dropping in the past few weeks. In fact, depending on where you are in the country, you now can get high-octane fuel from the big three brands for less than Php 50 per liter already. The price drop isn’t just being felt or limited to the Philippines though. In fact, it’s actually a global trend and could even cause prices to drop even further in the coming months.
Now, if you’re wondering why, the spread of coronavirus (COVID-19) worldwide is just partly to blame. Instead, it’s mainly due to Saudi Arabia’s price cut which caused oil prices to drop by nearly 34% to almost USD 27.34 (Php 1,385.76) per barrel, one of the lowest levels in four years. The cause of the price cut is reportedly due to a dispute between OPEC oil-producing nations (including Saudi Arabia) and Russia.
Saudi officials were said to be in talks with Russia to cut back oil production in an attempt to keep and support prices during the coronavirus outbreak. However, Russia refused to do so. As a result, Saudi Arabia’s response was to ramp up production and cutting prices. In fact, the Middle East nation even offered discounts on its official selling prices for April. This then effectively led to a price-war between OPEC (led by Saudi Arabia) and Russia.
What does this mean for us, the consumers? Well, expect prices of fuel to likely drop even more in the coming months. So yes, good news for us. Should the price war continue on, analysts expect that price of oil could drop to as low as USD 20 per barrel. The bad news is global stocks across the market, already affected by COVID-19, have already taken a hit due to the sudden price drop.