Oil price hike to affect cost of basic goods

CEBU, Philippines - Amid the incessant oil price hike and the impending fare increase, the Department of Trade and Industry (DTI) warns that cost of basic goods and commodities may also be possibly affected.

DTI Regional Director Asteria Caberte said that price increase of goods depends if the components of production is directly related with the utilization of petroleum products.

“Definitely, Cebu will be affected by the rising cost of petroleum products. Ang ato lang bantayan kung reasonable ba ang pagsaka. It should be an effect from the price increase of petroleum,” she said.

According to Caberte, anticipated price increase of commodities shall occur if they have high power consumption which denotes a direct impact from the oil price hike like cement and steel bars. But such increase may only take effect three months after since the inventory of manufacturers and distributors is good for that span of time.

Caberte added that since Syria, which is a major player in the oil industry, suffers difficulties and United States of America has its stock piling for production and inventory, there is currently a strict supply of petroleum while the demand continues to expand, causing the oil prices in the Philippines to rise.

No movement yet

For now, prices of some basic goods remain stable. In fact, Caberte noted that there is a possibility that prices for bread and pastries may decrease since there is a P5 roll back on flour prices.

However, the Philippine Baker Association has not declared yet its commitment for price decrease since there are other factors to consider in its production cost.

Prices of canned sardines, which are easily affected by oil price hike and now by the ban on herring or “tamban,” a raw material for such product, still have not moved.

“Canned sardines are some of the basic goods which will be affected by the oil price hike but the effect will be off-set by the lifting of the ban on herring. As of now, wala pa’y price movement but it may take effect late this March,” Caberte explained.

Moreover, Caberte expressed that price increase for basic goods must be within the suggested retail price agreed upon by the manufacturers and retailers and approved by the National Price Coordinating Council (NPCC).

“Dili basta-basta nga makapasaka og presyo. NPCC and DTI demand a show cost order from manufacturers who must, in return, send a communication to the concerned agencies explaining why the increase is needed,” the director said.

She added that prices may vary depending on the brand but they must be lower or equal to the SRP of the product. A 2% increase on some products is already considered high.

Manufacturers and price leaders also cooperate in the compliance level of price movement by disqualifying retailers who take advantage of the oil price hike or go beyond the agreed price.     

“A vigilant consumer is a protective consumer. If you think the price is ridiculously high, call DTI or the Consumer Welfare Desk,” Caberte advised. (FREEMAN)