Gas prices in RP one of lowest, says IPPCA

Despite oil prices marching towards $50 a barrel over the weekend prompting oil retailers across the globe to increase the pump prices of their products, petroleum products in the Philippines remain one of the cheapest in the region and the world.

This was disclosed by Independent Philippine Petroleum Companies Association (IPPCA) and Flying V president Ramon "Chito" Villavicencio who cited an independent research which showed that the P25.73 per liter price of unleaded gasoline in the Philippines is second lowest in a list of nine economies that were monitored.

"Thailand has the cheapest unleaded gasoline at a price equivalent P26.94, but the price difference in comparison to landed cost is subsidized by the Thai government.," Villavicencio said.

Diesel fuel is also second lowest in the Philippines at P20.23 per liter to Thailand’s P19.66 although the industry does not enjoy any subsidy from the government.

The Thai government spends 233 million baht (P311 million) a day to keep petroleum prices in its domestic market at present levels, explained Glenn Yu, vice president of IPPCA. Yu did the research for his association.

Other economies have made adjustments that reflect the hike in crude oil prices. Hong Kong now has the highest pump price of gasoline among nine surveyed countries at the equivalent of P84.74 per liter. It also has the highest pump price for diesel oil at P49.08 a liter.

Gasoline and diesel are second most expensive in South Korea, with gasoline priced at P65.41 per liter and diesel at P41.51 per liter.

Singapore, New Zealand and Australia have priced their unleaded gasoline products at a range between P42 and P49 per liter while in underdeveloped Cambodia, gasoline now costs P36.35 a liter while diesel is sold at P24.72.

Diesel fuel in Australia is the second most expensive among the surveyed countries, which, at P42.07 a liter is only lower than Hongkong.

In the United States, where 50% of crude is produced locally, gasoline is now sold at the dollar equivalent of P27.59 and diesel fuel retails at P26.66.

The oil players observed that even Department of Energy (DoE) Secretary Vincent Perez does not meddle when individual companies adjust their prices, the oil industry leader said.

Until now, petroleum prices in the Philippines have stayed second lowest compared to prices in other oil importing countries including the United States. Only Thailand has lower prices only because the Thai government set up an oil subsidy fund which is costing it more than P300 million a day, the oil industry leaders added.

Meanwhile, IPPCA Chairman and Eastern Oil president Fer Martinez appealed to businessman Raul Concepcion of the Consumer Oil Price Watch to stop acting as "oil price dictator."

"If he is sincere in protecting consumers‚ welfare, he should also monitor the movement of the prices of flour which is eaten by everybody in the form of pan-de-sal every morning. He must equally inform the public if overpricing is being done in the flour industry," added Martinez.

"With few facts to work on, Mr. Concepcion has sown confusion in the public mind. He should simply allow competition to work its natural course, instead of trying to dictate the prices of gasoline and diesel fuel and when or how oil firms adjust their prices, the IPPCA officers pointed out.

Under a deregulated environment, oil refiners and petroleum importers have tempered their margins to keep and enlarge their market shares. A comparative study made by IPPCA vice president Glenn Yu on pricing before and after deregulation showed that margins taken by Industry players have gone down by 25 percent compared to what the oil giants made when the government did the price fixing.