Fuel price rollback expected

Malacañang announced yesterday a possible rollback in the pump prices of gasoline and other fuel products as a result of the softening in crude oil prices in the world market.

In a statement issued by the Palace, Presidential Spokesman Ignacio Bunye tried to paint a bright economic outlook for the country despite the 5.4 percent average increase in the price of consumer goods in June.

The inflation rate rose last month to 5.4 percent from 4.7 percent in May, according to the latest figures released by the National Economic and Development Authority Tuesday.

The inflation rate in June exceeded most official and many private projections, as the steady hikes in oil prices triggered a sharp rise in the prices of basic commodities.

"The government is doing all it can to hold the inflation rate down while working on a better climate for economic growth," he said.

"We are also facing the possibility of a fuel price rollback and we hope this will help to even out the inflation rate," he added.

This was based on the report submitted to President Arroyo and her Cabinet by Department of Energy (DOE) Secretary Vicente Perez during the first Cabinet meeting of the newly elected administration in Clark Field, Pampanga last week.

Perez projects that the reduction in fuel prices will take place within the next two weeks as local oil companies led by the so-called Big Three — Pilipinas Shell, Caltex Phils. and Petron — adjust their prices downward.

He said local oil firms have to reflect their respective price adjustments following the decision of the Organization of Petroleum Exporting Countries (OPEC) to raise their production quotas and reduce the prices of world crude.

The looming oil price rollback will be the first fuel price reduction in the country after a steady increase in pump prices over the last six months.

Bunye also noted with optimism a marked improvement in productivity of the country’s major economic sectors.

"We have a 15 percent increase in exports, a stronger showing of the peso against the dollar, increasing trade in the stock exchange and a steady plus 50 increase in tourist arrivals," he said, adding that the Palace is optimistic that these productive gains will be sustained for the rest of the year.