Oil companies cut pump prices

MANILA, Philippines - Oil companies yesterday announced varying price rollbacks on petroleum products.

Petron Corp., the largest oil refiner in the country, has slashed the price of its regular gasoline products by P1 per liter effective today.

Chevron Philippines Inc. has also cut the price of its regular gasoline products by P1 per liter and its diesel and kerosene products by P0.75 per liter effective 6 p.m. yesterday. It said it based its price cuts on lower prices in the Mean Of Platts Singapore.

Independent oil players Flying V, Seaoil and Eastern Petroleum Corp. have slashed the prices of diesel and kerosene by P0.75 per liter, gasoline products by P0.50 per liter.

Meanwhile, the LPG Marketers Association (LPGMA) has also slashed their prices by P0.50 per kilogram.

LPGMA is composed of Omni Gas, Pinnacle Gas, Island Gas, Cat Gas and Nation Gas.

“We are expecting weekly decreases as everyone is anticipating a big drop in the contract price in March,” LPGMA president Arnel Ty said.

LPG is presently sold at P610 to P684 per 11-kg tank. LPG contract price dropped $5 in the world market at the start of the month from $736.50 per metric ton in January.

LPGMA reduced prices by P2 per kilo last month in anticipation of lower contract prices this month.

Consumer demand creates competition

Energy Secretary Angelo Reyes encouraged consumers to support oil firms that offer lower prices.

He said that because the Oil Deregulation Law prohibits the government from controlling oil prices, consumer demand creates the competition, which, in turn, leads to competitive pricing.

“We all want oil prices to be low, but the reality is we don’t have control over prices of oil. As it is a deregulated market, we cannot impose price control on petroleum products unlike on other products (sugar, rice, corn, cement and fertilizers),” he said.

Ninety-five percent of the country’s oil requirements are imported.

“It’s a given that we try to see to it that local prices reasonably reflect world oil prices. And we will not allow oil companies to abuse pricing.”

He said, however, that the varying prices in the market show there is competition among players.

“We are saying prices are determined by competition. It (price adjustments) cannot be done by oil companies at the same time and at the same levels for all products - then it could be because of collusion,” he said.

The energy chief also said varying pricing strategies is healthy for the industry.

“Pricing is a strategy in a competitive market. We should be doubtful if they all have the same price levels and if price adjustments are all done at the same time and at the same levels,” Reyes said.

“The nature of competition is that you compete on the basis of quality, pricing, and service a company extends to its clientele . . . It is better to have price differences as it will also pressure companies to bring prices lower,” he added.

Oil companies usually adjust pump prices by 30 centavos per liter for every $1 per barrel movement in world oil prices.

Based on Department of Energy monitoring, diesel is currently sold at P31.75 to P34.05 per liter while gasoline is sold at P41.20 to P43.10 per liter.