By:
Ronnel W. Domingo - 05:24 AM October 04, 2019
Customers deserved a price cut of 14-24 centavos more per liter in their
gasoline purchases this week, the Department of Energy (DoE) said.
The DoE added diesel
prices should have gone down by 6-16 centavos more than the price cuts oil
firms implemented.
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For the latest weekly price adjustments, most of the oil firms including
Petron, Pilipinas Shell and Chevron Philippines (Caltex) reduced gasoline
prices by P1.45 per liter and diesel by 60 centavos per liter.
The Philippines’ two
oil refiners as well as Chevron are the biggest companies in terms of market
share in fuel retailing.
Combined, these three
companies represented half of all fuel sold in the Philippines during the first
half of 2019—25 percent for Petron, 18 percent for Shell and close to 8 percent
for Caltex.
Phoenix Petroleum, with
a market share of 7.1 percent, implemented a bigger reduction for gasoline at
P1.55 per liter but smaller for diesel at 50 centavos per liter.
On Wednesday, Assistant Energy Secretary Leonido J. Pulido III said in a
briefing in Malacañang, “historically, the computations arrived at by the DOE
and the oil companies had been the same.”
Pulido said that, “for
the first time, this week, there has been a difference.”
Thus, the DOE issued
show cause orders for the oil companies to “explain how they arrived at their
computation.” The firms have until Monday to respond.
Pulido also said while
the oil industry was deregulated, the DOE could pursue administrative or
criminal cases against the oil firms if their explanations were not
satisfactory.
Meanwhile, the price of
Dubai crude has kicked up again weeks after the destructive attacks against
Saudi Arabian facilities.
As of Oct. 1, the price
of Dubai crude was at $61 per barrel, jumping from $56.71 per barrel on Sept.
30.
The Asian benchmark had
already fallen from $66.11 per barrel on Sept. 16 or the first trading day
after the attacks.
Renato Reyes Jr.,
secretary general of the Bagong Alyansang Makabayan, said the oil companies
indeed should be made to explain why the recent oil price rollback was smaller
compared to DOE estimates.
“Up to now it is not
clear how oil companies arrive at their prices,” Reyes said in an interview.
“The difference between the actual rollback and DOE computations, even if only
in centavos, can translate to millions in excess profits for oil
companies.”
He also said it was
even more anomalous that oil companies sell their products based on prevailing
world prices, even if they acquired these at earlier, much lower prices.
“Oil companies have
30-day inventories (and) they got their stocks at lower prices even before the
massive P2.35-per-liter increase last week,” he added. “This is the problematic
aspect of automatic adjustments under a deregulated environment.”
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