40¢ cut in oil prices this week pressed

Local oil companies should bring down the pump prices of their products by another 40 centavos per liter this weekend, the private sector Consumer Oil and Price Watch (COPW) said yesterday.

At the same time, COPW chairman Raul Concepcion said the public should not have to worry about any fuel price increase in the next two months.

"We should have a price rollback this weekend," he said. "The good news is that there will likely be no increase until the end of February."

Concepcion said local oil firms have no reason to jack up prices within the said period since the average crude oil price increase to take effect Jan. 21 is only 2.6 centavos.

In December, Dubai crude increased by only 16 centavos per barrel while the peso appreciated by 24 centavos.

No increase in pump prices should take place even with the recent decision of oil exporting countries to reduce output, Concepcion said.

"Notwithstanding the agreement by OPEC (Or-ganization of Petroleum Exporting Countries) and non-OPEC countries to reduce output by 1.5 million barrels per day starting Jan. 2, Dubai crude increased by only $1 to $17.90 on Dec. 31 from a low of $16.90 on Dec. 12," he said.

Concepcion noted that even before the Dec. 27 OPEC decision, production was voluntarily being reduced as oil producers had no storage capacity for petroleum products due to the sharp drop in demand.

Local oil firms last made an adjustment on Dec. 18, cutting prices by 30 centavos per liter on refined petroleum products.

The major oil players had ruled out any price adjustment in the last week of December, but admitted they may roll back prices early this month.

"Using the rule of thumb of a reduction of 32 centavos per liter for every decrease in the barrel price of crude and 12 centavos per liter for every peso appreciation, there is still room for some reduction of about 30 centavos. We may see that happening in January," outgoing Pilipinas Shell Petroleum Corp. chairman Oscar Reyes said.

Petron said that while it does not expect any price adjustment very soon, they would still act competitively on market forces.

The Dec. 18 price reduction was the country’s 11th for 2001 and the sixth since the Sept. 11 terrorist attack on the US. Since the suicide attacks in Washington and New York, the price of crude in the world market has been softening as crude demand drops.