DOE: Stronger dollar contributed to recent oil price hike

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Metro Manila (CNN Philippines, June 28) — The dollar’s stronger performance against the peso played a role in this week’s fuel price increase, the Department of Energy said Tuesday.

Ang nakita namin bakit tumaas, it’s because of one variable: ‘yung forex. Binibili ho natin itong mga krudo natin at oil products based on the dollar kaya nagtaas ho ang foreign exchange, kaya tumaas din presyo natin,” Energy Usec. Gerardo Erguiza said in a public briefing.

[Translation: We saw that rates went up because of one variable: forex. We buy our crude and oil products based on the dollar so the foreign exchange went up, causing our local prices to go up too.]

The peso traded as high as ₱55.15 against the dollar this Monday, its weakest since October 2005. However, it eventually closed at ₱54.78 versus the US currency — ending its decline since June 15.

The Bangko Sentral ng Pilipinas earlier allayed concerns over the peso’s weaker performance, attributing it mainly to a “stronger dollar phenomenon.” 

“In addition to that po, because of the demand situation dun sa freight eh nagkakaroon ng malaking demand. Nagkakaroon din sila ng additional premium sa cost at ‘yung mga traders because of demand,” Erguiza added.

[Translation: In addition to that, because of the freight situation there is also higher demand. This results in additional premium on cost and for traders.]

Oil companies raised fuel prices again this morning, marking the fourth straight week of increases.