‘Big 3’ raise pump prices by 50¢/liter

After a series of price cuts, the country’s three top oil firms announced yesterday an increase of 50 centavos per liter in their pump prices, citing the recent surge in international crude prices.

Pilipinas Shell Petroleum Corp. and Petron Corp. raised pump prices effective 12 noon and 6 p.m. yesterday, respectively, while Caltex Philippines’ increase takes effect today.

All three major oil players, however, said they would retain the diesel discounts for public utility vehicles at all their stations nationwide.

Other minor oil companies said they were still studying their figures but would most likely raise their prices anytime soon.

The price of Dubai crude, the benchmark used by local oil refiners, increased from $44.76 per barrel in May to $49.10 this week.

Seaoil Philippines president Glenn Yu warned of the continuing volatility of global oil prices last week.

"The market is still very volatile. I believe that the rollbacks have already been reflected in the current prices," he had said, hinting that the downward trend in oil prices could be reversed soon.

As Yu had foreseen, Shell, Caltex and Petron raised their pump prices after a series of price rollbacks.

The recent oil price hike, however, is contrary to the expectation of Raul Concepcion, chairman of the Consumer and Oil Price Watch (COPW), who had earlier said he was not expecting an increase in local oil prices even after the government starts implementing the 10-percent VAT on petroleum products on July 1.

Concepcion said there were measures in place to offset the anticipated increase in fuel prices brought about by the new tax law.

"There is a big reduction on excise tax on diesel. Whatever is the increase in VAT, I believe, will cancel out all the over- and under- recoveries of oil firms," he said.

The Bureau of Internal Revenue (BIR) will release the implementing rules and regulations on the new VAT law by the end of this month.

Concepcion said he could not estimate yet the actual impact of VAT on oil prices.

"While we do not have actual figures yet on the impact of VAT, I support the government’s objective of looking for ways to cushion its impact on consumers. Oil prices should be maintained," he said.