24¢ fuel price hike seen next month

Oil prices may be increased by 20 to 24 centavos per liter in the second week of May.

Raul Concepcion, Consumer and Oil Price Watch chairman, said yesterday major and new oil players may raise fuel prices because of the pesos’s depreciation in the past weeks.

"There would be an oil price increase in the range of 20 to 24 centavos per liter in the week ending May 19," he said.

Concecpcion said that based on a formula of the Department of Energy (DOE), the projected price increase next month is between 46 to 50 centavos.

"After deducting the 26 centavos April balance due from oil companies, the net oil price increase is 20 to 24 centavos in May," he said.

Concepcion said the reasons for the possible fuel price hike are the projected average increase of crude prices by 65 cents ($24.10 in April against $23.45 in March) and the peso depreciation of 50 to $1 in April compared to 48.52 in March.

Concepcion said oil firms should inform the public of what is happening within the industry so that they could justify their moves.

But Virginia Ruivivar, Petron corporate communications head, said their move would depend on the market.

"We are continuing to review the movements of the bellweather Dubai Crude and the peso value relative to the dollar," she said.

Ruivivar said Concepcion’s assumption is short of what the company needs.

"Based on the current rates of these two factors, an adjustment of 48 centavos a liter in pump prices should be reflected," she said.

Ruivivar said that as of April 23, the average cost of Dubai was $24.07 per barrel while forex average was at P50.10 to $1 compared with the average forex of P48.42 to a dollar and $23.35 per barrel of oil in March.

On the other hand, Oscar Reyes, Pilipinas Shell Petroleum Corp. chairman, told reporters: "It is too early to say we have to check for ourselves the final movements of crude and forex rates for April. There are still five days."

However, Fernando Martinez, president of Eastern Petroleum Corp., and New Petroleum Players Association of the Philippines, said: "If prices would be tempered this month is because of the effect of competition in the industry."

Martinez said they are hoping that President Arroyo would not intefere in the pricing schemes of oil companies.

"I don’t think the President would talk to the oil firms on this one because she is liberal and not an interventionist," he said.