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Oil prices have minimal impact on power rates: DOE

The recent increases in oil prices will have minimal impact on power rates, Department of Energy Assistant Secretary Gerardo Erguiza Jr. said yesterday.

During the Laging Handa briefing, Erguiza said “very few” power plants in the country are fueled by oil. 

Most of the country’s power plants are coal-fired and run by renewable sources.

“We do not have a problem (on power rates due to oil price hike) because for other sources like coal and the renewable sources, we don’t have (supply) problem,” he said in Filipino.

Erguiza added the current situation in the oil market is mostly affecting the transport sector.

Oil firms on Tuesday hiked pump prices for six consecutive weeks.

Year-to-date, price adjustments posted an increase of PHP16.55 per liter for gasoline, PHP15 for diesel, and PHP13 for kerosene.

The DOE official said oil price increases in the past weeks were brought by tighter global supply amid rising demand as economic activities peaked during the last quarter of the year.

Global oil demand is around 103 million barrels per day (bpd) but supply is only at 100 million bpd, short of 3 million bpd.

The Organization of Petroleum Exporting Countries and its allies (OPEC+) is sticking to its plan of gradual increase in output of 400,000 bpd until April 2022 to offset its existing 5.8 million bpd production cuts.

Erguiza said the government is pushing for fuel alternatives in the transport sector, particularly the use of electric vehicles.

“So, the direction here is not to be dependent on oil, especially for transportation. We see to it that we have a program for the entry of electric vehicles,” he added.*PNA

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