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By Euan Paulo C. Añonuevo
Reporter
Consumers should brace not only
for a deluge of price hikes at the pumps in the coming weeks but
higher ones at that as oil companies move to recover from the higher
cost of oil in the world market.
During an industry meeting called
on Monday by the Department of Energy (DOE) to shed light on recent
price increases implemented by the oil firms, Edgar Chua, Pilipinas
Shell Petroleum Corp. country chairman, said the firms are set to
jack up fuel prices by P7 per liter.
“On the basis of today’s
prices, both in the international and the local pump prices, and on
a purely cost point of view, the selling prices are P7 lower than
the cost,” he added.
As a result of the hefty rise in
world oil cost, the oil companies are seen to veer away from a
previous understanding with the government to peg adjustments at
P0.50 per liter and start implementing P1 per liter increases
similar to the previous one implemented by oil firms over the
weekend.
“Our under-recoveries are
increasing. If we keep to the P0.50 per liter, it will take several
months to recover the amount,” Chua said.
The amount, however, may still go
up or down depending on foreign-exchange fluctuations and
competition in the sector, among other factors.
Chua said diesel prices are
likely to take the brunt of the impending price adjustments as “a
number of refineries in the region are shutting down,” causing
tightness in supply of the transport sector’s fuel of choice.
Patrick Libihoul, Liquigaz
Philippines Corp. president and managing director, said the price of
liquefied petroleum gas (LPG) in the coming months may not be as
volatile. “LPG is a seasonal product that is usually cheaper in
the summer than in the winter, when it is used for heating,” he
explained.
Arnel Ty, LPG Marketers
Association head, agreed. He said the LPG contract price abroad,
with cooking gas retailing at about P587 per 11-kilogram cylinder
locally, may have reached its peak this month and may go down in the
short to medium terms.
The increase implemented by the
oil companies on Saturday was the ninth since the start of the year,
which has seen world oil prices breaching record highs.
Despite further increases
expected at the pumps in the coming weeks, the government is not
likely to suspend the value-added tax (VAT)
imposed on petroleum products. The suspension was proposed by
various groups. But, Energy Secretary Angelo Reyes said, it would
take a proposal from Congress before such mitigating measure can be
adopted.
Sen. Francis Escudero also on
Monday said the 12-percent VAT imposed on systems loss was
“electrocuting” consumers.
Escudero, the chairman of the
Senate Committee on Ways and Means, added that consumers are
victimized twice over when they pay the VAT on the power that they
were forced to pay but did not enjoy because it was stolen.
Meralco is charging its customers
for a systems loss of more than 10 percent. Escudero said this is
one of the primary reasons for the country’s expensive power
costs.
What the government is banking on
instead is a study commissioned by the Energy department and
conducted by the University of Asia and the Pacific and the Sycip,
Gorres and Velayo accounting firm to ascertain the
“reasonableness” of the oil firms’ price adjustments.
“The audit of the oil companies
through a review of the accounting records [of the firms] is
continuing,” Reyes said.
He conceded, though, that sifting
through the oil companies’ books, which was initiated late last
year, is taking more time than expected and may take a while before
it is accomplished.
In light of the soaring price of
oil and the rising prices of food globally, industry players called
on consumers to conserve energy and open up to alternatives, such as
LPG for vehicles, which offer savings of up to 40 percent of regular
fuel costs.
Reyes said the regime of high oil
prices “is a problem that will be with us for the years, decades,
to come.”
Officials of the oil companies
said they are doing their part to help the public through a number
of goodwill projects and price-increase mitigating measures, such as
staggering price hikes and offering discounts.
“Higher energy prices will
continue and it should become a way of life for the public, for us
to be conscious of high energy prices not only for fuel but also for
electricity,” Nicasio Alcantara, Petron Corp. chairman, said.
The government supports the
opening of books of another player in the energy sector—Manila
Electric Co., or Meralco.
“There’s news that Meralco
would be subjected to examination of [its] books. This is subject to
verification, so what is important is that the books must be
opened,” Press Secretary Ignacio Bunye said also on Monday. Under
the Corporation Law, he added, a stockholder has the right to look
into a company’s data.
Ordinary people want transparency
for them to know whether the charges being imposed by Meralco are
fair, Bunye said.
--William B. Depasupil, Efren L. Danao And Sammy Martin
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