DoE Sees Further Rollback in Pump Prices This Month
Byline: MYRNA M. VELASCO
The Department of Energy (DoE) is expecting pump prices to dip further this month as a result of the continued plunge in world crude prices and the stability of the peso against the US dollar.
Though he would not quote an amount how much more price rollback he is expecting, Energy Secretary Vincent Perez indicated that there is still room for further price cuts; on top of the reduction of R0.30 per liter for gasoline and R0.20 per liter for diesel and kerosene products implemented last week.
We also anticipate further reduction in pump prices; as trend continues in direction where crude costs are going down and the appreciation of the peso against the US dollar, he stressed.
As of May 8, the price of benchmark Dubai crude was at average $23.18 per barrel as against $23.46 last month; while the peso-dollar exchange rate stands at R52.32 compared to R52.75 in April.
The drastic softening of international pump prices came immediately after the resolution of the US-led attack on Iraq; as the $10 premium being imposed on oil products during such crisis situation had been lifted.
The price downtrend went on even after the decision of Organization of Petroleum Exporting Countries (OPEC) to bring down production quota to pre-war level; which is 25.4 million barrels per day. This meant taking out from the market roughly 2.0 million barrels daily of the 27.4 million production set during the war.
The oil companies earlier reasoned out that there was a delay in reflecting the softening of prices in the domestic market because they were then faced with the dilemma of high level of inventories; a strategy imposed by government supposedly to avert a crisis situation that may result out of the US-Iraqi conflict. …