A. World Market 

Continued recovery in world demand has resulted to global supply-demand balance crude oil deficits of 370,000 and 140,000 barrels per day (b/d), respectively, in the first and second quarters of 2021. Reportedly, this market sentiment will continue to develop, with projected increasing demand versus ongoing supply restrictions from the Organization of Petroleum Exporting Countries (OPEC) and United States’ sanctions against Iran and Venezuela, which are all seen to be the underpinning factors pointing to sustained price increases for the rest of the year. 

1. High demand.  Platts Analytics’ projections for the third quarter of the year shows an increasing demand. The increase in demand is expected to be around 5.98 million b/d of crude oil higher than the second quarter.

2. Insufficient increase in supply. This projected increase of around 5.98 million b/d for the third quarter however will not be fully covered by the projected increase in supply. The projection shows that the non-OPEC countries will increase their supply only by around 830,000 b/d, while OPEC countries have agreed only to increase their production by around 800,000 b/d for the third quarter (400,000 b/d installment per month for the month of August and September). This imbalance for the third quarter is expected to result to a projected insufficiency of crude oil global supply by around 4.35 million b/d. 

3. Continuing US Sanctions. Further to the ongoing OPEC crude oil supply restriction, around 2 million b/d from Iran and 700,000 b/d from Venezuela remain restricted due to US sanctions. These additional supplies could have helped eased the insufficiency of supply.

B. DOMESTIC MARKET 

Despite the observed sustained increase in price, however, the government affirms its support to the consuming public through the following:

• Assistance to the Transport Sector. The government through LTFRB has distributed around P1.158-billion budget allotted for the Direct Cash Subsidy Program under the Bayanihan To Recover As One Act which aims to provide financial aid to PUV operators who were affected by the government’s measures to control the spread of COVID-19. The program targets to cover at least 178,000 PUV units with cash subsidy amounting to P6,500 per PUV unit. 

• Power of Choice. Sustained government efforts to encourage consumers to exercise their power of choice in the selection of liquid fuel retail outlets (LFROs) that offer lower prices, including discounts being offered to the public transport sector.

C. ENERGY EFFICIENCY FOR CONSUMERS

• Fuel Economy. The Department of Energy’s (DOE) sustained communication campaign on fuel economy which emphasizes:

1. Efficient Vehicle Utilization
• avoiding hard braking and acceleration
• observing good car maintenance 
• planning trips beforehand
• using navigation apps such as Waze or Google Maps
• avoiding idling of vehicle; turn off the engine when waiting or parked for long periods of time
• using of carpool whenever possible, following the IATF-prescribed health and safety protocols

2. Using Alternative Modes of Transport
• walking when covering short distances
• using a bike

For its part, the DOE shall always be with its stakeholders in finding solutions to current and future challenges during this pandemic. 

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