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Diesel prices are expected to increase again within the week,
despite a sharp decline in world oil prices that closed at $138 a
barrel.
Ed Chua, Pilipinas Shell Petroleum Corp. country
chairman, said Wednesday current fuel costs at the pumps are still
below landed costs or what oil firms paid for in importing their
products.
But any adjustment would only hit diesel, as
gasoline costs “are still good,” he said without elaborating.
“Based on pure cost, we’re still below landed costs. For diesel,
we still have under recoveries.”
Before last week’s pump price adjustments, the
19th for the year except for gasoline, oil company officials said
petroleum firms still have to recover P5 per liter from diesel
prices.
Think-tank IBON Foundation, however, said
earlier that the country’s three largest oil firms—Petron Corp.,
Shell and Chevron (formerly Caltex) Philippines Inc.—have been
collecting more than what they should from consumers as their mother
firms continue to rake in billions of dollars in profits.
But for Shell’s global operations, Chua said
the company has reinvested a bulk of its profits into exploring new
sources of petroleum.
He added that while the Shell group earned $27
billion last year, it has allocated $23 to $25 billion as capital
outlay. “The money is being plowed back to the business. Right now
the cost of developing new fields is very high.”
He claims the petroleum industry is the most
transparent, since product pricing can be checked for consistency
with market prices and standards.
“I would actually welcome a dialogue with IBON,
so that we can understand where both of us are coming from,” he
added.
World prices
Oil prices continued lower in Asia on Wednesday
after fears for economic growth sent them tumbling to their steepest
fall in 17 years during New York trading, analysts said.
New York’s main oil contract, light sweet
crude for August delivery, was 64 cents lower at $138.10 a barrel.
The contract sank $6.44 to close at $138.74 on
Tuesday at the New York Mercantile Exchange. It was the sharpest
single-session decline since January 1991.
“I was stunned,” said Dave Ernsberger, Asia
director of global energy information provider Platts. “At one
point crude futures fell by $10 in one hour.”
Brent North Sea crude for August delivery was 36
cents lower at $138.39 a barrel following a plunge of $5.17 to
settle at $138.75 Tuesday in London.
Analysts said the heavy falls coincided with US
Federal Reserve Chairman Ben Bernanke’s semiannual forecast to
Congress, in which he said there was a “high degree of
uncertainty” about the US economic outlook.
“The move down started when Ben Bernanke
started speaking on television,” Ernsberger said. “It fell while
he was talking.”
Bernanke said the Federal Reserve had lifted its
outlook for the US economy this year, in a forecast that appears to
show no recession.
The central bank projected 2008 growth in a
range of 1 percent to 1.6 percent, up from an April projection of
0.3 percent to 1.2 percent.
But he warned of numerous risks, including a
potentially troublesome rise in inflation and stressed financial
markets.
-- Euan Paulo C. Añonuevo and AFP
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