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By Euan Paulo C. Añonuevo, Reporter
Fuel prices are projected to hold steady in the
next two weeks because of recently declining world oil prices,
petroleum company officials said Friday.
In a press conference, Fernando Martinez,
chairman of the Independent Philippine Petroleum Companies
Association, said his group may maintain current pump prices in the
next week or so.
“We are seeing a substantial reduction in oil
prices,” he added.
But a “rollback is not in the offing,”
because average oil prices this month are still higher by about $3
to $4 per barrel, he said. That translates to about P2 per liter in
underrecoveries for diesel prices.
At present, Martinez said oil firms still have
P3 to P4 per liter to recover from motorists as a result of their
underrecoveries in June. But he remained mum on whether oil
companies will still recover this from consumers or offset the
amount altogether should world oil prices continue with its descent.
Martinez, also president of Eastern Petroleum
Corp., said oil firms’ plan to possibly hold off any price
adjustment is not in any way in response to any political pressure
from President Gloria Arroyo, who is to delivery her State of the
Nation Address on Monday. Local oil firms have been increases pump
prices 20 times so far this year.
On the sidelines of the press conference Friday,
association officials said the group remains independent of any
party or group.
A week ago, the President “appealed” to
Petron Corp., which is 40-percent owned by the government, to temper
a P3-per-liter increase in diesel prices. This prompted a number of
oil companies to follow suit on a roll back initiated by Petron for
half of its adjustment on Monday.
Other association members include Flying V,
Seaoil Philippines Inc., Unioil Philippines Inc., Filpride Energy
Corp., Filoil Finance Management Corp., Chemrez Technologies Inc.,
Liquigaz Philippines Corp., Pryce Gases Inc., Senbel Corp., Oilink
International Corp. and International Engineers Philippines Inc.
Zero tariff
Zenaida Monsada, director of the Department of
Energy oil industry management bureau, said the government will be
maintaining zero tariff on oil products, as prices in the
international market have yet to go down to the levels where the
tariffs could be charged again.
The government had earlier cut tariffs on oil
products to mitigate the impact of skyrocketing oil prices, which
pushed up local pump rates.
Data from the Energy department showed that as
of July 24 prices at the Mean of Platts of Singapore, the benchmark
used by importers of finished-oil products such as the members of
the association, was averaging at $171.70 a barrel for diesel from
$169.36 a barrel in June; and $138.61 a barrel for unleaded gasoline
from $140.30 a barrel.
On the other hand, Dubai crude, the benchmark
for prices used by oil refiners, was averaging at $133.91 a barrel
from $127.82 a barrel over the same period.
Oil edges higher
World oil prices were higher in Asian trade on
Friday in a market calmed by slowing global demand, analysts said.
In afternoon trade, New York’s main contract,
light sweet crude for September delivery, was 73 cents higher at
$126.22 a barrel from $125.49 at the close of trading Thursday on
the New York Mercantile Exchange.
Brent North Sea crude for September delivery
rose 52 cents to $126.96 after settling at $126.44 in London on
Thursday.
Both contracts rose by more than $1 on Thursday
following a tumble of about $4 the previous day. Analysts said a
bigger-than-expected increase in US gasoline reserves signaled
weaker demand in the United States, the world’s biggest energy
consumer.
Ken Hasegawa, manager of the energy desk at
Newedge Japan brokerage, said the market had “calmed down” and
would trade in a short-term range of $123 to $128.
“So far, there is no special news in the
market,” he said.
Crude oil prices shot to a series of record
highs earlier this year, partly because of political tensions
involving oil-producing nations like Iran, which refuses major
powers’ demands to halt its nuclear program.
Prices have tumbled since peaking above $147 a
barrel on July 11.
Falling demand growth for oil has cooled the
market, Hasegawa said. Overall demand is still growing—providing
some support—but the rate of increase has slowed, he said.
For Alaron Trading analyst Phil Flynn, the bears
are coming out of hibernation after months of sizzling price rises.
“The myth that emerging market demand would
totally offset the loss of US demand is now being shattered. Price
still matters to the demand side of the equation and eventually that
will always be the great equalizer in a bull market,” Flynn said.
Uncertainties, including tensions between the
West and Iran, continue to provide underlying support to the oil
market, Hasegawa said, forecasting a medium-term price range of $120
to $130 a barrel.
Prices broke through $100 a barrel for the first
time at the start of the year.
-- With AFP
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