2018 Fuel Prices in retrospect

For the past 12 months, we’ve experienced dramatic fluctuations in our petroleum industry. More for our despair, the Department of Energy (DOE) announced additional fuel excise tax the very moment 2019 hit the calendar. Before the changes of this new added excise tax take effect, we thought it would be a good idea to review what went down last year, in terms of the Philippine fuel economy – just to prepare you on how this year would go.

As you might clearly recall, January 2018 marked the beginning of the fuel price surge, in the name of the government’s TRAIN law. In the data generated by DOE, the average prices before January 2018 ends reached P51.47 for unleaded and P41.55 for diesel, which are the most commonly pumped fuel. These were mowed down a bit in February but the relief wasn’t for long. From March, prices began increasing until we reached June – one of the three months where fuel prices are in their highest. 

Here, you may check out this chart showing the average fuel prices by the end of each month:

The other two months where prices are at their peak level were September and October. The price for the unleaded gasoline (RON91) that time averaged to P57.80, while the diesel was at P47.00. The prices for the premium (RON95) and premium plus (RON97) gasolines were unforgiving, as they were averaging at P61.50 and P58.50, respectively the end of that month. Those were the times the industry was brought down to its knees, as daily commuters suffered to sustain their fuel budgets. 

Things then, starting November, began to get lighter, as fuel price rollbacks storm the news for weeks until December. However, you may expect a higher peak now that there is an additional P2.00 per liter rate on diesel and gasoline and P1.00 per liter for kerosene and LPG. Although the effects of this so called ‘second phase of Tax Reform for Acceleration and Inclusion (TRAIN) law’ has yet to make an impact (thanks to the remaining fuel supply from 2017), it looms quick escalation considering the additional rates.

By comparing 2018 from 2017, we saw quite huge differences, not only on the actual prices themselves but the pattern of increase. Let’s narrow down our scope to unleaded gasoline and diesel, first. The highest rate both fuels reached in 2017 are P47.35 for unleaded gasoline and P36.35 for diesel. Take note that these are average prices from at least seven petroleum companies. That’s a P10.00-difference compared to the highest price in 2018 for unleaded gasoline, while it’s almost P5.00 for diesel. 

Here’s a graph comparing the activities in the prices of unleaded gasoline (RON91) for 2018, versus 2017: 

Here’s a graph showing the same comparison for diesel: 

As you can observe, there’s a notable trend wherein both values for the years 2017 and 2018 meet close range in December. This was due to the continuous price roll back we experienced on the last month of 2018. Meanwhile, the lines reveal huge gaps in terms of the average prices, although the pattern of up and downs is quite linear for both years. Do we expect even higher values for 2019 due to the phase-two of fuel excise tax? It could probably be the case. In simple analogy, you can treat December’s fuel roll backs as the calm before the great storm.

Note: The fuel prices used in this article are from the Retail Pump Prices - Metro Manila data, as recorded by the Department of Energy. You may review it at www.doe.gov.ph.