MANILA -- Philippine motorcycle enthusiast John Aldwin Bagabagon rode easier than many other local motorcyclists and drivers this year as domestic fuel prices surged to record levels.
Bagabagon, 35, and his family are among 200,000 consumers turning to a homegrown app to secure credits for bulk fuel supplies at low prices, saving about 50% on their gasoline purchases over the past four months.
"I save a lot especially now that gasoline prices are rising weekly," Bagabagon said.
The app PriceLOCQ allows users to stock up on fuel at a set price by converting purchases to digital credits that are later redeemed at SEAOIL Philippines petrol stations.
Mark Yu, who launched the PriceLOCQ app in 2020 and whose family owns independent fuel company SEAOIL, says use of the app has "skyrocketed" since prices started rising this year, especially after Russia's attack on Ukraine disrupted global oil markets.
Gasoline sales via the app in a single day in mid-March hit 2 million litres, matching volumes for the entire month of February as consumers scrambled to get ahead of price spikes.
|A motorcycle rider shows the PriceLOCQ app before refueling in a gas station in Muntinlupa, Metro Manila, Philippines April 7, 2022. Photo: Reuters|
Half of PriceLOCQ's clients are new customers of SEAOIL, which has around 6% of the retail fuel market, said Yu, who is also the chief financial officer of SEAOIL.
PriceLOCQ is the only app of its kind in the region, Yu said. Yu's personal venture, LOCQ, is behind it, and partners with hedging firms to offset the risks amid volatile prices.
The Philippines imports more than 90% of its annual fuel requirements. Pump prices in capital city Manila, an urban sprawl home to 13 million people, have risen by 30% for gasoline and 66% for diesel this year, government data shows. Gasoline hit a record of 81.85 pesos ($1.56) per litre in mid-March 2022.
Early adopters of PriceLOCQ were able in 2020 to purchase up to 600 litres (158.5 gallons) of gasoline and diesel products for future refuelling at around 20 pesos per litre. Prices now are around 79 pesos per litre.
While locking in prices in a rising market is enticing, consumers are advised not to hoard gasoline and buy according to their needs, said Bernard Flores, a Manila-based financial consultant for Pru Life UK.
|Mark Yu, CEO of LOCQ, pictured during an interview with Reuters about the app PriceLOCQ, in Pasig City, Metro Manila, Philippines April 6, 2022. Photo: Reuters|
Authorities have also warned customers to understand the underlying risks of using the app, including the non-transferability of the credits and the danger of buying bulk fuel and seeing prices fall.
"It’s like the stock market where you find the desired price you prefer and you lock in on it. Whatever happens, whether the prices go up or down, you are locked in," Flores said.
Many motorists remained undeterred, though, especially those on the roads as part of their job.
"If this app didn't exist, we would have a difficult time because ... we use gasoline every day," delivery worker Johnrey Omolon said.
"It's a huge help. We get to prepare (for changes) every time gasoline prices increase."
($1 = 52.33 Philippine pesos)