Here’s Why Fuel Prices Are Up

Here’s Why Fuel Prices Are Up

Fuel prices have been increasing for the 10th consecutive week now and they are expected to increase even further in the upcoming weeks. At the rate fuel prices are increasing, you might be wondering if prices are still reasonable. From the effects of the Russia-Ukraine war, global gas shortage, and the Philippine oil deregulation law: Here’s everything you need to know why gas prices are going insanely high these days.

Here’s Why Fuel Prices Are Up
Photo from

Let’s start with the tight global petroleum inventory as it had been an issue before Putin ordered the attack on Ukraine. 

According to reports, the market is overheating right now—there is just too much demand as the global economy is rapidly recovering from the coronavirus pandemic and major oil producers are unable to increase output. 

This has caused the global petroleum inventory to be at its “tightest” in years, thereby increasing both current prices and future prices.

Here’s Why Fuel Prices Are Up
Photo from CNN

To make things worse, there’s an ongoing war in Ukraine which is heavily affecting the fuel supply in the global market. Following Putin’s order to invade last Feb. 24, prices of the global benchmark Brent crude oil soared past $100 a barrel for the first time in more than seven years. According to the Department of Energy, Ukraine is a key oil and gas transit hub between Russia and Europe.

Now that we have established that there is a global problem with the fuel supply, it’s time to apply one of the most fundamental economic principles: when demand exceeds supply, the prices tend to rise. This is the very reason why fuel prices are soaring.

Unfortunately, the Philippine Government can only do so much about the issue, thanks to Republic Act 8479 entitled “Downstream Oil Industry Deregulation Act of 1998.” This law has basically reduced the Government’s control on oil-related pricing activities and trade restrictions on the pretense that firms will enjoy a more competitive market and continuous supply of high-quality fuels.

According to the DOE Oil Industry Management Bureau Director Rino Abad, “In the absence of price control under the deregulated regime and the untargeted subsidy policy just like the previous OPSF (Oil Price Stabilization Fund), the prevailing policies now are to ensure the implementation of competitive price and for the government to offer targeted relief assistance.” 


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