COMMUTERS need to brace for higher fares soon, after oil companies yesterday increased diesel and kerosene prices by P2 a liter and gasoline prices by P1 a liter.
It was the 18th increase in pump prices so far this year.
The increase came a day after government announced that rising prices of food and fuel pushed the inflation rate to its highest level in 14 years, at 11.4 percent.
Given the relentless oil price increases, Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Thompson Lantion said the agency is likely to approve a P1 fare increase for jeepneys and a P10 “add-on” in cab fares.
He told radio DzMM that the decision to raise fares will likely be issued within the month, after being reviewed by the National Economic Development Authority (Neda).
Pilipinas Shell and Eastern Petroleum raised their prices at 12:01 a.m. yesterday, followed six hours later by Chevron, Petron, Seaoil and Total Philippines, GMA News reported.
Before the seventh straight weekend marked by oil price increases, the Bangko Sentral ng Pilipinas had predicted the double-digit inflation.
In a statement two days earlier, it also projected inflation to average between seven and nine percent for the year, above the government’s target. It projected inflation to decline to four to six percent in 2009.
Acting Socio-Economic Planning Secretary Augusto Santos said the latest figure brought the average inflation rate for the first six months to 7.6 percent, higher than the government’s target of three to five percent for the whole year.
Presidential spokeswoman Lorelei Fajardo said the government is “committed to seek ways to soften the impact of inflation.”
“In the meantime, we urge all sectors of society to help in the government’s efforts to conserve on fuel. Also, we urge our food manufacturing sector to be sensitive to our consuming public,” she said in a statement.
The new round of fuel price increases could pressure more businesses to close, business leaders in Cebu said.
Carlos Co, who owns Cebu Oversea Hardware and other businesses, said yesterday’s P2 fuel price increase cannot be passed on to consumers because prices of commodities are already high and there is stiff competition.
Co, a past president of the Cebu Chamber of Commerce and Industry (CCCI), said the cost of delivering goods has also increased but is still being shouldered by the business owners.
For construction materials, Co said those who have started their projects are forced to finish them despite the high prices, just to prevent losses.
On the other hand, those who have yet to start with the construction will have second thoughts about pushing through with the project or may not pursue it at all.
“There is really an economic slowdown,” Co said.
Robert Go, owner of Prince Warehouse, said that because of the increase in freight rates, prices of commodities from suppliers, especially multinational firms, automatically increased.
Go, also a CCCI past president, said “there is an impending economic downturn in the country” and small and medium enterprises will find it a challenge just to survive.
“With the increase in operational cost, drop in sales that leads to the drop in profit and sometimes losses, big companies are withholding expansion while the others are planning to close their businesses,” Go said.
Josefina Lim, spokesperson of the Associated Labor Union, said that minimum wage earners will suffer the most with the increase in the prices of commodities because they have no fallback position.
Fuel prices rose 22 percent in June from a year ago, up from an increase of 18.2 percent in May.
Transportation and communication costs climbed 12.4 percent last month compared to June the previous year, after rising 8.6 percent in May.
The opening of classes in June also raised expenses for education, providing a significant boost to inflation, the economic planning agency said. (EOB/AP)
