Weak peso may push up fuel, power costs

SINGAPORE – The peso sliding to record lows against the dollar could squeeze household budgets and threatens to push electricity bills and fuel prices even higher.

Energy Secretary Sharon Garin, on the sidelines of the Singapore International Energy Week, warned that the weakening peso could drive up the cost of imported coal, diesel and liquefied natural gas.

This could put further upward pressure on domestic energy prices, particularly electricity rates, amid the ongoing global oil crisis and the looming El Niño threat.

The local currency breached the 64-per-dollar mark for the first time in intraday trading yesterday, extending its string of record lows.

The Department of Energy (DOE) is exploring possible measures to cushion the impact of the peso depreciation and continued market volatility.

Garin said she would meet with Energy Regulatory Commission chairman and CEO Francis Saturnino Juan to discuss possible regulations to prevent sudden spikes in electricity bills.

The weakening peso has already contributed to higher electricity rates this month in Metro Manila and nearby provinces, as some power supply contracts are dollar-denominated.

At the pumps, the DOE is considering the staggered implementation of price adjustments to help ease the burden on motorists.

“We’ll ask them (oil companies) again once we see the computations this week. Normally, they follow, but hopefully, it won’t be necessary anymore,” Garin said.

For this week, the DOE prescribed maximum price hikes of P1.20 per liter for diesel and P0.50 per liter for kerosene.

Gasoline prices, meanwhile, went down by at least P0.30 per liter.