Domestic oil prices to remain volatile — Lotilla

Domestic oil prices will remain volatile, thus the need for government to push further efforts toward energy independence, said Energy Secretary Raphael Lotilla.

Yesterday, Total Philippines Inc. and Eastern Petroleum Corp. increased their pump prices by 50 centavos per liter due to competitive pressures. The three big oil firms — Petron Corp., Pilipinas Shell and Caltex Philippines — raised their prices yesterday by the same level.

Lotilla noted that the House Committee on Appropriations has recently endorsed for plenary deliberations the proposed bill mandating the use of bioethanol or ethyl alcohol as transport fuel.

He said this is most encouraging as it will help cut down the country’s reliance on imported oil, particularly for unleaded gasoline, for the transport sector.

In 2004, the country’s consumption of unleaded gasoline consumption was at four billion liters, with the demand expected to grow by 4.7 percent in the next 10 years.

"Aggressive development of alternative fuels for the transport sector will surely cut our dependence on imported oil," Lotilla said, adding that these fuels are environment-friendly.

At the Legislative-Executive Development Advisory Council (LEDAC) meeting yesterday, Lotilla emphasized the need to enact bio-ethanol, bio-fuels and renewable energy bills to provide a legal framework to achieve 60 percent energy self-sufficiency by 2010.

"With high prices of imported oil, the only way to go is to be prudent in the use of electricity and to intensify efforts to develop alternative and renewable energy sources, and to make sure that energy is adequate and affordable in the long-term," the energy chief said.

To lessen the impact of rising imported oil prices on electricity rates, he said the National Power Corp. (Napocor) is reducing the utilization of bunker and diesel-fired power plants by relying more on indigenous energy sources such as hydro and geothermal for power generation.

Lotilla said the reduction in the use of oil-based plants will cut its oil consumption by 470 million liters or equivalent to P5.9 billion fuel savings for Napocor.

World oil prices have been in the uptrend since the start of this month, with Dubai crude hitting $49 per barrel in June from an average of $45.39 per barrel in May.

Asian benchmarks for finished petroleum products have also increased in June with unleaded gasoline reaching $58 per barrel from a low of $52 per barrel in May. Diesel is now also hitting the $70 per barrel level.

Lotilla said the DOE will continue to strengthen its monitoring of the domestic and international oil markets to ensure that consumers are protected from any unscrupulous activities.