Chevron hikes oil price by P1, others to follow

MANILA, Philippines - Chevron Philippines has announced that it would increase prices of all its petroleum products by P1 per liter today, and other oil companies are expected to follow suit.

Just two days ago, major oil players increased prices by at least P1 per liter while some of the new oil players increased pump prices by P2 per liter.

On the same day, the Department of Energy (DOE) said that the price adjustment was justified, and that another P1 per liter adjustment was inevitable.

However, an economist agreed that upward price adjustments were in order in the face of the volatile global oil prices.

For the month of February, the benchmark Dubai crude averaged over $100 per barrel from only $92.52 in January, or hitting a two-and-a-half-year high of nearly $112 per barrel on Feb. 24.

Finished product prices also surged following the significant increase in crude prices.

Gasoline averaged $112/barrel last month versus $106/barrel in January reaching as high as $123/barrel.

Diesel prices, meanwhile, averaged $119/barrel last month jumping nearly $10/barrel from January.

University of Asia Pacific economist Peter Lee U said an oil firm whose inventory is already depleted will have no choice but to buy oil at higher cost and will reflect this higher cost in the domestic price.

He said the Philippine oil scene competition would also dictate on domestic prices even if the majors had inventories.

Sen. Ralph Recto said oil companies are unfairly increasing prices.

“We beg oil companies to hold off their greed even if it would be a lame attempt to show to the public that they are really sensitive to the people’s already dire situation,” he said.

Oil firms assured the public that they would help consumers mitigate the impact of high oil prices in the world market.

The energy department issued recently a new circular “enjoining all companies to engage in mutual product sharing accommodation and similar industry to stabilize oil supply.”

The plan is “recognized as an accepted downstream industry practice which serves public interest and is intended to achieve efficiency, cost reduction and ensure continuous supply.”

Energy Undersecretary Jay Layug said the department received commitment from the oil companies that “they will continue to give fuel discounts and implement corporate social responsibility programs to the transport sector.”

Layug said the oil firms also agreed to comply with the circular requiring oil firms to maintain a minimum inventory level of 30 days for refiners and 15 days for other oil firms while liquefied petroleum gas will have an inventory of seven days.

Before the re-imposition of the circular, refiners are required to have a minimum 15-day inventory for crude and petroleum, and for oil importers, seven days and LPG products at seven days.

Shell, the country’s second largest oil firm, said that as the Philippines is a net importer of oil, the country remains highly vulnerable to developments in the oil producing countries.

“Due to the ongoing tension in the Middle East, we have tasked our businesses to ensure that contingency plans are kept updated to ensure continued delivery to meet our customers’ needs,” Roberto Kanapi, Shell vice president for communications, said.

Petron Corp. said it was reviewing operational measures to ensure supply continuity in case of an emergency.

“As a Filipino company, we strongly support government’s measures to ensure local fuel supply. Even though maintaining a high inventory is costing Petron a lot, we will do it just to make sure fuel is available. We will cooperate fully with concerned agencies,” said Ramon Ang, Petron chairman and chief executive officer.

“As an oil importer, we have no control over oil

prices, but we are working closely with our international suppliers to guarantee crude oil supply for the country.”