Two other oil companies — Total Philippines Corp. and Flying V — also announced an increase in pump prices effective today and tomorrow, respectively. A sixth firm, Unioil, will also increase its prices by 50 centavos per liter starting 6 a.m. today.
Chevron and Unioil officials explained the latest increase in pump prices reflected the unabated upward movement of finished product prices in the regional market and competition.
The oil companies that have implemented their oil price increases assured they would not hike the prices of liquefied petroleum gas (LPG).
Prices of refined oil and finished products have been on the upward trend.
Dubai crude peaked to another record of $65.30 per barrel as of April 17 from March’s $57.82.
MOPS-based diesel also reached its record high of $89.29 average per barrel as of April 17 from $77.99 last month. MOPS unleaded gasoline, on the other hand, increased to an average of $85.25 per barrel from $69.64 last month.
If this trend continues, Flying V spokesman Macky Lopez said oil consumers could expect weekly adjustment of pump prices to last from six to eight months.
With the latest price adjustment, Lopez said oil companies need to recoup about P3 per liter under-recovery in the local market due to continuing rise in world crude prices.
According to Lopez, there is a need for the government to study carefully how they would convince consumers to conserve fuel.
He said studying the number of buses plying the country’s thoroughfares could be one of the possible ways to conserve oil.
"The Department of Energy (DOE) should have an effective way of information dissemination particularly on the use of alternative fuels such as cocobiodiesel," he said.
Lopez said the government must be firm in implementing the policy against colorum jeepneys and buses.
Crude oil reached a high of $75.35 per barrel in the global markets last week, prompting the government to initially consider the temporary suspension of the 12 percent value-added tax (VAT) on imported petroleum products in the effort to cushion consumers.
But after the country’s economic advisers expressed their opposition to the proposal citing possible repercussions on the economy, Malacañang clarified the VAT suspension would be their "last option."
Cebu Rep. Eduardo Gullas said any suspension of oil taxes would give the opportunity to oil refiners and importers to exploit the resultant tariff differential to further increase margins and jack up their pump prices.
"Our concern is that in the absence of a significant and definite benefit to end consumers, any tax cuts on oil will just give oil companies greater leeway to expand margins, this time not only at the expense of consumers, but also at the expense of much-needed government revenues," Gullas said.
The Cebu lawmaker said he opposed the temporary suspension of the VAT on oil for the same reasons he is rejecting the proposed tariff cut.
Gullas cited the revelations of his colleague two weeks ago, claiming Petron and Pilipinas Shell reportedly amassed a whopping P11.8 billion combined after-tax profits in 2005.
This was up P5.54 billion or 88 percent from the P6.26 billion in aggregate after-tax earnings they posted in 2004, Gullas said.