Local Firms Raise Oil Product Prices by ?0.49 per Liter

Manila Bulletin, January 3, 2003 | Go to article overview

Local Firms Raise Oil Product Prices by ?0.49 per Liter


Byline: MYRNA M. VELASCO

In an initial salvo for the New Year, local oil companies have jacked up pump prices by 0.49 per liter for all petroleum products.

The companies, including majors Petron Corp. and Pilipinas Shell Petroleum Corp., matched the increase implemented by Caltex Philippines, Inc., last week.

Aside from increases in the prices of gasoline, diesel, and kerosene, the oil companies are also scheduled to adjust the prices of liquefied petroleum gas (LPG) by R1 per kilogram or P11 per 11kilogram cylinder, which is the standard size used by most households for cooking.

Pilipinas Shell was the first to make an announcement of its planned price increases for LPG and all of its other petroleum products effective 10 p.m. last night.

Shell spokesman Roberto Kanapi said the increase was due to the increase in LPG contract price worldwide which went up to $337 per metric ton this month from $218 per metric ton in June last year.

"The increase in pesos should have been R6 per kilogram but we have only implemented R4.25, excluding the latest P1 adjustment," Kanapi said.

With the adjustment, Shellane's 11-kg cylinder tanks now costs between P296 to P301 from P285 to P290 previously.

The pump prices of Petron will go up effective 12 noon today; and its LPG prices will go up effective 6 p.m. on Monday, Jan. 6.

New oil firms Eastern Petroleum, TotalFinaElf Petroleum Philippines Corp., and Unioil also announced plans to increase their prices that would, more or less, match the adjustment imposed by the industry's "Big 3."

Eastern Petroleum Chairman Fernando L. Martinez said his company will implement a R0.49 per liter increase effective 6 a.m. today.

Aside from this round of price adjustment, he noted that there might be two more price increases up for implementation within the month as the Mean of Platts Singapore (MOPS) climbed by almost $3.50 per barrel between November and this date. The MOPS is used as benchmark for pricing imported finished petroleum products being sold in the domestic market.

On top of competitive pressure, the oil companies said the new batch of increase is attributed to the upswing in crude prices in the world market last month as a result of the decision of the Organization of Petroleum Exporting Countries (OPEC) to slash production by 7.0-percent; which is equivalent to 1.7 million barrels per day.

It was noted that the cost of Dubai crude went up by around $2.00 per barrel last month to $25.44 as against November average price of $23.31 per barrel.

Businessman and Consumer Oil Price Watch Chairman Raul T. Concepcion, however, questioned the basis of the oil firms' decision to implement upward adjustment in prices; as he noted that there remains a buffer when they have foregone another round of rollback last month.

The oil firms stressed that the impact of their compliance to the Clean Air Act is not included yet in the implemented price increase.

"The cost attributed to our compliance to the Clean Air Act is not yet factored in," oil company officials said, noting that such may trigger another climb in pump prices this month.

Shell noted that the estimated increase was actually at R0.92 per liter; but since they have foregone another rollback in December in relation to the softening of international prices the previous month; the January increase was slashed to the R0.49 per liter level.

For the Clean Air law, the oil companies initially estimated an uptick of R0.80 to R1.50 per liter; but they said they are still reviewing their figures.

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Local Firms Raise Oil Product Prices by ?0.49 per Liter
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