Pilipinas Shell Petroleum Corp. (Pilipinas Shell) said that it lost more than P200 million in the past two months as prices of imported crude oil continued to move up without any relief in sight.
"We purchased crude at $24 per barrel but sold the same for something like $22," Pilipinas Shell vice president Rey Gamboa said.
The Feb. 1 price hike, resulting in an average increase of P0.49 liter was based on a crude price of $22 covering the price period of November 1999. The last price adjustment in 1999 was done in November by an average P0.42 liter.
Prices of crude were running at an average $22 per barrel but the November price hike was based on the crude prices of $20.
"We would like to hold back any price adjustments this month but we do not know how long we can hold of as (the) Dubai (spot market) already hit $26 a barrel," Gamboa added.
Earlier, Pilipinas Shell executives said under recoveries, or the accumulated losses due to the high price of imported crude oil, reached a whopping P700 million as of January this year.
The losses are a direct result of not being able to increase the price of petroleum products since November last year. The last price hike was registered on Nov. 1, 1999 covering the month of October.
In an interview, Pilipinas Shell president Oscar Reyes said there is no way the losses can be recovered except to increase prices of petroleum products.
Reyes said oil companies are prepared to "temper" the increase in lieu of the economic and social conditions of the country. "It is always a sensitive issue when it comes to a price hike."
Earlier, Petron Corp. admitted before a congressional inquiry that it registered losses of P500-million to a price hike."
Petron chairman and chief executive officer Jose Syjuco Jr. said the loses are eating up into their expansion program.
Syjuco said the only reason they have not raised prices so far is that such a move is politically sensitive.
Oil companies said they will try to "hold out (any price increases) as long as possible."
Unnamed Petron officials said they "will not move, and will wait for results" referring to the meetings held between members of the Organization of Petroleum Exporting Countries (OPEC) this month. The meeting is expected to result in either a continuation of the production cutback or an increase in production.
The oil production cutback is the principal reason why the price of crude (Dubai) has grown from $10 a barrel in March last year to $26 in late February this year.
Officials of both Pilipinas Shell Petroleum Corp. and Petron Corp. said they were not in a position "at the moment" to comment as they were still reviewing their statistics and other critical factors like the foreign currency adjustments and the price of imported crude oil.