The Department of Energy (DOE) expects the country's oil companies to start reducing the prices of petroleum products following a steady decline in world crude oil prices.
Prices of Dubai crude oil dropped to $20.24 per barrel compared to last month's average of $25.06.
"If they want to get ahead of the competition, oil players will have to be more proactive in adjusting the prices," Energy Sec. Mario V. Tiaoqui said in a statement.
Tiaoqui added that "competitive pressures will remain one of the biggest considerations in price setting in the listing deregulated environment."
Crude prices started to drop since the Organization of Petroleum Exporting Countries (OPEC) agreed to infuse 1.4-billion barrels of oil per day to ease the pressure on the world market.
Earlier, Petron Corp. and Pilipinas Shell Petroleum Corp. said that a rollback is possible if prices of Dubai crude oil remain below $22 per barrel while the peso does not depreciate beyond P42 to the dollar.
The two major oil players said that they still have underrecoveries for the period of November 1999 to March this year as their price adjustments were only to cover for the purchases.
Petron chairman and chief executive officer Jose Syjuco Jr. said in a press briefing that "if the monthly average of April stabilizes at a price band between $21 to $22 per barrel ex-Dubai/Oman, there is a possibility of a rollback."
Syjuco pointed out that the local oil industry is not only concerned with the price of imported crude oil and the foreign exchange market. Players in the oil industry must also look at the transportation cost, rate of return, and competition.
"Even if we wanted to drop prices, we have to consider the movements of the major competitors (w and Shell), but also the pricing habits of the new players," he said.