Oil Prices on $61 a Barrel

I had a glimpse of the newspaper headline today that says “Oil Plunges to $61/barrel” so I thought of checking the history of oil prices in the last few months. With a record of $147 a barrel in July that caused the rise in prices of gas, LPG, goods, commodities and fares, the oil price has gone down to more than 50%.

With such drop in prices, consumers (including me) expect that there will be a noticeable price decrease. Unfortunately, the cost of 11-kilogram LPG is still at about Php650.00 instead of the previous less than Php500.00 per 11-kilogram cylinder. Fare, goods and commodities have not decreased. Some goods and commodities are even predicted to have price increases due to the incoming holiday season. Oil prices are slashed by mere Php1.00 to Php3.00 per liter.

Some of the reasons cited why oil prices can not have an immediate decrease are the cost of the available stock is higher, that the oil companies are still trying to gain their losses, and reimposing of tariff. These are reasons which are hardly understood by most common people. What they do understand is that when there is a news of oil price increase, local oil prices immediately follows. But, when there is a price decrease, it takes sometime before a price decrease is implemented and that even if the previous low price is surpassed, the oil price will not go back to the level or lower than before.

As to when the price decrease becomes noticeable, it is a wait-and-see game.