MANILA, Philippines – Oil companies Chevron (Caltex), Pilipinas Shell Petroleum Corp. and Petron Corp. will implement today another oil price cut of P1 per liter on all their pump products. Small oil company PTT Philippines Corp. announced a similar oil price reduction of P1 per liter.
Chevron will reduce its prices for Caltex Gold, Silver E10 and regular gasoline as well as Power Diesel and kerosene by P1 per liter (VAT included) effective today.
Petron public affairs manager Virginia Ruivivar said this was the third price rollback in eight days.
Ruivivar said that since August this year, their diesel and gasoline prices have both been decreased by P19.50 per liter.
Last Wednesday, the oil firms also reduced their pump prices by P1 per liter.
The price reduction came after the National Economic and Development Authority (NEDA) criticized oil companies for not reflecting the true cost of fuel in the international market.
Meanwhile, the Independent Philippine Petroleum Corp. (IPPCA) has cried foul over the government’s intervention on market prices.
“If they would come up with some estimates or computations, they should be able to substantiate their claims,” IPPCA chairman Fernando Martinez said.
Observers said that since the market is already deregulated, the government is prohibited from making any form of intervention.
According to observers, the public should also be aware of some “politicking” which tends to use the socially-sensitive issue of oil prices to gain public trust.
NEDA had come up with a supposed P9 per liter more in rollbacks that the oil companies should undertake for the remainder of the year.
As in previous instances, the Department of Energy (DOE), which is aware of its limitations under the Oil Deregulation Law of 1998 or Republic Act 8479, has never been into releasing projections or amounts of reductions or increases that the oil players should implement.
Disputing NEDA’s claim, Martinez said based on their own computation, the $15 drop in world crude prices from October to November will only result in P4.50 per liter rollbacks for the rest of the year. As rule of thumb, every dollar drop or increase in world crude prices is equivalent to 30 centavos drop or increase in local pump prices.
Since they have already implemented P1 per liter rollback middle of this week, they only see another P3 to P3.50 per liter oil price cut in the remaining days of the year.
“NEDA did not give the computation on how they came up with such amount. We met with NEDA director general Ralph Recto and presented our own figures and how we came up with our own computations,” Martinez said.
“We think that it is but fair for the oil players that if someone will come up with such allegations or computations, they should be able to present how they were able to come up with such amount,” he said.
In pricing oil products, Martinez said there are other costs that should be taken into consideration such as freight, insurance, among others.
Energy Secretary Angelo Reyes, for his part, said the Department of Energy “is continuously pressing for the reduction of local oil prices pursuant to the prices in the international market.”
“We are closely monitoring prices and putting pressure on the oil companies individually and collectively,” he said, adding that they expect more oil price reductions in the coming weeks.
But Reyes said he understands the predicament of oil firms in not implementing the reductions at once due to shipment processes.
“The prices of Dubai crude that we see today cannot be reflected immediately since it takes about a month to bring said crude into the country,” the energy chief said.
Last October, Dubai crude averaged $67 while gasoline was at $79 per barrel and diesel at $89 per barrel.
In November, Dubai crude average is $52 while gasoline is at $52 per barrel and diesel at $70 per barrel.
For the month of November there has been an average rollback of P3 per liter for gasoline and P2 per liter for diesel, with 16-17 rollbacks totaling P20 and P20.50 per liter respectively since July when international oil prices reversed its upward trend. - Donnabelle Gatdula