The Department of Trade and Industry (DTI) has urged producers of consumer goods to slash prices in response to lower transportation costs brought about by the dramatic drop in world oil prices.
“Filipino consumers should also benefit from the continuous fall in world oil prices that have gone down some 30 percent since June this year,” DTI Secretary Gregory Domingo said.
Domingo has instructed DTI’s Consumer Protection Group (CPG) to determine how much should be deducted from the suggested retail price (SRP) of basic necessities and prime commodities, which include agricultural and non-agricultural products, because of lower transportation and energy costs.
“We are going over our data to check how the price drop should be reflected on the prices of basic and prime goods. The steady decline of oil prices should now have a significant impact on the prices of all products and services. At the minimum, they should decrease by 3 percent,” the DTI secretary said.
DTI’s Consumer Protection and Advocacy Bureau has already released guidelines for the pricing of several basic products. According to the guidelines, a 155-gram can of sardines should go down by P0.22; a 370-milliliter can of evaporated milk by P0.95; a 50-gram coffee refill by P0.99; and a 25-kilogram sack of flour by P25.91.
On November 28, the Organization of Petroleum Exporting Countries (OPEC), in its 166th meeting in Vienna, Austria, decided not to cut output and maintain production at 30 million barrels per day as previously agreed upon in December 2011.
Immediately after this, the price of the benchmark Brent crude fell below $72 a barrel, its lowest since August 2010, before settling at $72.82, a 5 percent drop on the same day.
Because of this, oil prices are expected to remain low in the months to come.
Meanwhile, the DTI, as head and secretariat of the National Price Coordinating Council (NPCC), will coordinate with members of the council to determine the extent of the effect of the drop in world oil prices on products and services.
According to Department of Energy (DOE) records, the average pump price of diesel fell about 20 percent this year, from P44.63 per liter in January to P36.71 in November.
DOE records also show that the average household Liquefied Petroleum Gas price plummeted by about 25 percent during the same period, from P45.36 per kilogram (kg) to P34.54 per kg.
The DTI is also urging government agencies such as the Land Transportation Franchising and Regulatory Board, Civil Aeronautics Board, Maritime Industry Authority, and the Energy Regulatory Commission, to assess the impact of the 30 percent decrease of world oil prices on trucking and shipping rates, land transportation fares, fuel surcharges, and electricity rates, among others.
“We are calling on producers and distributors to share with the public the savings they are realizing as a result of the lower cost of transportation and energy, particularly on agricultural products and basic consumer goods,” Domingo said.
“This (the price adjustment) would be a timely and much needed service to Filipino consumers especially with Christmas just around the corner.” Voltaire Palaña