Oil prices may soften, even pull back next month — Concepcion

Consumer advocate Raul T. Concepcion yesterday said oil prices will likely start to soften next month, with the possibility of an oil price rollback.

"While it is still early, COPW (Consumer and Oil Price Watch) is optimistic that we have reached the peak levels of oil prices in August and the increase in October will be moderate or even a rollback," Concepcion told a press conference.

Concepcion also congratulated Petron Corp. for taking the lead in announcing that "they might be able to hold on to current prices if the easing of prices is sustained until the end of this month."

The industrialist noted that the price of Dubai has been going down daily over the last 12 days and last Saturday went as low as $ 34.20.

According to Concepcion, the Dubai Crude average is $3.33 lower (Sept. 9 average of $35.22 vs August average of $38.55). Dubai crude is the pricing benchmark of oil refiners.

Earlier, COPW announced that the price increase of Petron and Pilipinas Shell Petroleum Corp., the country’s two oil refiners, will be 91 centavos for diesel and a rollback for gasoline of 63 centavos for this month.

"We requested Petron and Shell to offset their over recovery for gasoline of 91 centavos against their under recovery for diesel of 63 centavos so that the net increase of diesel will be lower," he said.

"Very likely, with the decision of Petron to hold prices, the new players will likely increase the diesel price and not gasoline but will be calibrated to reflect the drop in oil prices," Concepcion said.

In accordance with the request of President Arroyo, the Department of Energy and the COPW, the increases will be carried out by oil companies through staggered basis.

Meanwhile, Energy Secretary Vincent S. Perez strongly urged oil companies to hold pump prices at the current levels to reflect the downward trend in world oil prices beginning this month.

"We don’t see any increase in pump prices for the rest of this month," he said, pointing out that global oil prices have shed more than $3 per barrel in recent weeks due to an oversupply in the market.

"Computations show that there are still unrecovered costs on the part of the oil companies after world oil prices skyrocketed last few months," he said. "However, our efforts to implement frequent adjustments, up or down, to immediately reflect the trends in the oil market prove to be advantageous on our side. We expect the oil companies to keep their prices at steady level," he stressed.

Oil refiner Petron Corp. over the weekend has said it will maintain present levels of prices till the end of September. Petron also said it will continue to thoroughly assess market conditions before adjusting prices anew.