As Christians celebrate the resurrection of Jesus Christ, oil companies join the festivities by pumping up the pump prices gas.
While I have never agreed with their pricing formula (from day 1), I will set aside that topic and for now, talk about another aspect-- how the world oil prices affected us within the past couple of years.
Comparing the prices of crude oil to the retail prices of downstream products (unleaded, diesel, etc.) in this country, we will notice that the movements of the two were not exactly parallel. As of May 2007, crude oil was being traded at the $65 level (per barrel) and at present, the price is moving from $96 ~ 110/barrel - it has almost doubled.
As for the prices of downstream products, I do not have the exact figures but an informal survey assured me that its increases are not even near that magnitude. The reason for such an anomaly is quite Obvious. The peso is stronger than it was 2 years ago and just recently, the tariff was reduced.
Imagine if the peso remains at the P50 = $1/level. The gas prices would have easily doubled and all consumer products should have risen catastrophically. But since the peso got stronger, the current price of commodities have not increased as much.
That is something that some people fail or refuse to realize -- things could have gotten a lot worse had the peso not appreciated. As a dollar earning individual, I, together with this country's OFW's and exporters have lost quite a lot within the last two years. However, I am thankful that my loss also meant lesser burdens for most of the 80 million citizens of this country. My ForEx losses meant lesser income for me but it also extended the life of a lot of people who are unemployed or underemployed - those who never had access to enough pesos.
While I have never agreed with their pricing formula (from day 1), I will set aside that topic and for now, talk about another aspect-- how the world oil prices affected us within the past couple of years.
Comparing the prices of crude oil to the retail prices of downstream products (unleaded, diesel, etc.) in this country, we will notice that the movements of the two were not exactly parallel. As of May 2007, crude oil was being traded at the $65 level (per barrel) and at present, the price is moving from $96 ~ 110/barrel - it has almost doubled.
As for the prices of downstream products, I do not have the exact figures but an informal survey assured me that its increases are not even near that magnitude. The reason for such an anomaly is quite Obvious. The peso is stronger than it was 2 years ago and just recently, the tariff was reduced.
Imagine if the peso remains at the P50 = $1/level. The gas prices would have easily doubled and all consumer products should have risen catastrophically. But since the peso got stronger, the current price of commodities have not increased as much.
That is something that some people fail or refuse to realize -- things could have gotten a lot worse had the peso not appreciated. As a dollar earning individual, I, together with this country's OFW's and exporters have lost quite a lot within the last two years. However, I am thankful that my loss also meant lesser burdens for most of the 80 million citizens of this country. My ForEx losses meant lesser income for me but it also extended the life of a lot of people who are unemployed or underemployed - those who never had access to enough pesos.
4 comments:
I gotta say...comparing rising fuel costs with a religious holiday is a very unique comparison. Kudos!!
Tommy
Hi JC,
Perhaps you can also add rising temperatures and reduced farm yield for agri products especially rice, corn, and wheat. These will raise the prices of food in the next 2 months. :-)--Durano, done!
Hi Tommy! Thanks for the good words. I wanted to tackle the oil issue but decided to talk about it next time.
I like your blog
Hi Durano,
I would like to talk about those issue in a separate article but I would like to do away with lengthy posts. Let's see.. Thanks!
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