MANILA, December 24, 2004 (STAR) By Donnabelle Gatdula - The country’s three major oil companies along with several small oil players are cutting pump prices by an average of 30 centavos per liter.
Pilipinas Shell and Petron Corp., two of the country’s major oil players, announced yesterday a reduction of 30 centavos per liter in gasoline prices effective this Christmas eve.
Caltex Philippines Inc. and small oil players Total Philippines Inc., Eastern Petroleum Corp., Seaoil Philippines Inc. and Uni-oil Philippines Inc. cut pump prices last night.
Flying V, owned by the Villavicencio family, implemented a higher reduction of 35 centavos per liter earlier on Dec. 23. Flying V operates 114 gasoline stations nationwide.
The reduction came following the call made by the Department of Energy (DOE) and the Consumer and Oil Price Watch (COPW) urging the oil firms to cut pump prices in line with falling world crude prices.
Energy Secretary Vince Perez called on the oil firms last Monday to reduce the prices of petroleum products due to the softening of world oil prices after hitting record highs in the past months.
Only Subic-based PTT responded to the call and reduced its gasoline price by 50 centavos per liter last week.
Other oil firms opted to reduce the price of their liquefied petroleum gas (LPG) by an aggregate of P2 per kilo. They also offered public transport groups a discount of 50 centavos per liter on diesel products.
The latest oil price rollback on gasoline came a few days after COPW chairman Raul Concepcion hit the continued refusal of oil companies to reflect world oil prices, saying it does not foster the right environment under the Oil Deregulation Law.
"I think they are abusing the consumers. Based on our computation, they should have reduced the prices of fuel products," Concepcion said.
Concepcion noted the clamor for the review of the Oil Deregulation Law and the creation of an independent body to conduct the review and recommendation.
Concepcion said oil firms should also be "responsible" enough to explain to the public why they continue to maintain high prices while there is a noted drop in crude prices in the world market.
"It would definitely be reflected in their profits this year. Obviously, they would record higher earnings in 2004 compared to 2003," Concepcion said.
Concepcion expressed his belief that most of the oil firms are just holding back, waiting for the implementation of the import tariff increase starting next year.
"So whatever rollback they will make will become academic (with the imposition of the new tariff rate on petroleum products)," he said.
Higher oil prices will prevail next year with the imposition of the five percent import duty on imported crude and all refined petroleum products except liquefied petroleum gas (LPG) by Jan. 1, 2005.
The DOE gave the go signal for oil firms to pass on to their customers additional costs incurred due to the increase in the import tariff to five percent from the present three percent.
Based on DOE estimates, the national government would raise additional revenues of P5.58 billion a year from the new import duty levels.