Every Pump Counts: The Effects of Fuel Increase in the Operations of GlowCorp

By Jonah May Nueca, UPLB Intern

As the international economy recovers from the effects of the COVID-19 pandemic, it has experienced demand and supply shocks, or big shifts in production, consumption, and global trade of goods and services. The Philippines, as a consistent top importer of oil, mainly from the Middle East, and finished petroleum products from neighboring countries like China and Singapore is highly affected by soaring oil prices dependent on price fluctuations in the world market. Insufficient oil supply is a crucial reason for these fluctuations since the top exporters experience political and economic crises such as the Russia-Ukraine war and even effects brought on by natural calamities. From a closer perspective, the situation negatively affects small consumers, especially since it now results in higher prices of basic commodities too.

Image courtesy of Manila Standard

Since the first months of the oil price hike in the country, GlowCorp is not spared from its unfavorable effects. Committed to supporting suppliers from Luzon, Visayas, and Mindanao areas, GlowCorp however experiences higher freight costs. Delivery costs for one twenty-footer container van raw alone swell by 70%, from Php54,000 to Php92,000 as of today. GlowCorp mostly sourced its raw materials in North Cotabato, Sultan Kudarat, General Santos City, and Misamis for its supply of cocosugar, organic rice, and muscovado. The distribution of products from the supermarket to its branches nationwide incurred a 3% increase in the delivery charge.  As high as 35% promotion was requested by partner outlets to counterbalance the pressures of soaring transportation costs. However, a sudden change in expenses is not a decision that can be thought of overnight, considering the welfare of its shareholders and stakeholders as a social enterprise. Instead, GlowCorp continues to cope by expanding and negotiating with more outlets, as well as by effectively considering cheaper raw material sources and efficiently managing delivery schedules. 

As mentioned, the country is highly dependent on fuel imports and other basic goods. However, it must be understood that the inflationary trend in basic necessities is also influenced by the tax imposed on these imported goods as well as the pressure of the weakening peso. It is therefore a small yet smart move to continue patronizing locally-produced goods. With the surge in the prices of basic commodities in an unstable economy, the effects are heavier for the marginalized sector. GlowCorp then strives to sustainably and fairly serve, and uphold its commitment to local farmers, start-up entrepreneurs, and other small social enterprises.


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