DOE to oil firms: Defer price hike

The Department of Energy (DOE) has urged the oil companies to defer their planned price hike next month.

DOE undersecretary Ben Hur Salcedo said there is no reason for local oil players to jack up their pump prices in March even if the government restored the three percent tariff on imported and refined petroleum product.

"It is best for major players to observe first the price trends in the international market and further assess full month’s situation before making any adjustment," he said.

Salcedo said while crude prices exhibited a slight increase due to Oil Petroleum Exporting Countries (OPEC)’s decision to cut its production by 1.5 million barrels per day, it will be prudent for players to further assess the full month’s situation before making any price adjustments.

Salcedo said that if Dubai prices will be maintained at $25 per barrel with the three percent tariff, and the foreign exchange rate at P51 to the dollar, the present price levels can still be maintained until the end of March.

Major oil companies use Dubai crude as their benchmark for pricing their pump products while new players use the MOPS.

As of Feb. 26, Dubai crude was pegged at $23.29/barrel while the foreign exchange rate stood at P48.09 to the dollar.

Salcedo noted that while Caltex Philippines Inc., one of the Big "3" oil firms in the country, has raised its wholesale posted prices (WPP) by five centavos per liter last week, no increase in pump prices was effected.

Other major players Petron Corp. and Pilipinas Shell Petroleum Corp. have said they wait for further development middle of March to decide whether to raise pump prices or not.

"We will be able to announce our decision in the next two days," Antonio Pelayo, the former corporate communications of Petron. Effective yesterday, Pelayo will be replaced by Virginia Ruivivar, who used to hold the investment relation division of the oil firm. Pelayo will reportedly handle the new ventures of Petron.

"We acknowledge the market trends," Salcedo said, stressing that under deregulated environment, players can adjust prices as they see fit.

As a regulator of the oil industry, it is the energy department’s function, however, to check if these adjustments are fair and reasonable.

DOE shall continue to monitor daily international and domestic prices and assess the reasonableness of domestic prices.

Meanwhile, Salcedo said the government is constantly reviewing all its options to come up with a solution that would best serve the interest of the country.

As this developed, the DOE said they might slap charges against the National Power Corp. (Napocor) in the recent accident at the Tiwi Geothermal Power Plant resulting in the death of two plant workers and hospitalization of two others.

Specifically, DOE said Napocor may have violated the Revised Geothermal Safety and Healthy Rules and Regulations (RGSHRR). DOE said Napocor may have failed in the implementation of the work permit system, provision on material safety data sheet, conceptualization of an emergency action plant and organization of an emergency response team, which contributed to the occurrence of the accident.

Salcedo said investigation conducted by DOE, Department of Health and Region V local police revealed that the death and hospitalization was attributed to exposure to toxic substances present in the area. Clinical manifestations of fatalities revealed a similarity to gas/solvent or heavy metal poisoning.

According to Salcedo, the accident could have been prevented if the workers had full knowledge on the characteristics and presence of toxic chemicals / substances and were equipped with adequate protective equipment.