No more oil price hikes this year — Concepcion

There will be no more oil price adjustments for the rest of the year, Consumer Oil Price Watch (COPW) chairman Raul T. Concepcion said over the weekend.

"It is likely that we will not see another oil price increase this year," Concepcion said in an interview with The STAR.

At the same time, Concepcion said the COPW will coordinate closely with the country’s major oil players to determine the basis of their last oil price hike. He believes that the big oil players should have implemented a much lower price increase.

"I think there is no reason for them to make the same oil price increase as the small oil players. This is why I will carefully study and look at their figures," he said.

The industrialist had earlier projected that for the new players, who import all their gasoline and diesel requirements, the average oil price increase for November should be approximately 78 centavos per liter for gasoline and 15 centavos for diesel.

Concepcion said the projection was based on MOPS (Mean of Platts Singapore) which is being used by independent players as a gauge in pricing their products in the domestic market.

He noted that average gasoline prices in MOPS increased to $36.54 in October as against $34.32 in September. For diesel, prices averaged $33.55 in October from $33.11 in September.

Concepcion said in the case of the oil refineries which import 30 percent of blended gasoline and diesel from the region (MOPS) to mix with their local refined production of 70 percent Dubai crude to comply with the requirements of the Clean Air Act, the average oil price increase is substantially lower than the new players or about 46 centavos per liter.

"Based on COPW calculations, the oil refiners will need to recover 46 centavos in November. They have already raised their prices by 40 centavos on Nov. 5 which was earlier than the supposed implementation of the oil price hike which should be in the third week of November. This means, they should not be recovering the six centavos anymore because of the early price adjustment," Concepcion said.

The major and small oil players have raised their prices twice this month by a total of 70 centavos per liter (40 centavos in Nov. 5 and 30 centavos in Nov. 25).

Industry leader Petron Corp. confirmed Concepcion’s pronouncement that the recent price adjustment will be the last for the year. "It will probably be the last increase for the year," Petron said adding.

Unioil spokesman Lawrence Luang also shared Petron’s view. "I doubt if we will move by December," he said.

they would likely not pass on yet to their customers the cost of the new diesel specification on their prices this month.

"We have been absorbing the impact of the new diesel specs since August when we implemented it," he said.

Oil prices are expected to increase by early next year due to the compliance with the Clean Air Act. It was estimated that the impact on oil prices will range from 20 to 50 centavos per liter.

The oil companies signed a covenant with the Department of Energy (DOE) to voluntarily accelerate the use of low sulfur diesel in all their service stations and retail outlets in Metro Manila by Nov.1, 2003.

Republic Act 8749 or the Clean Air Act mandates oil companies to reduce the sulfur content of automotive diesel by 75 percent from 0.2 percent to 0.05 percent effective Jan. 1, 2004.