Monday, July 21, 2008 Oil firms grant P1.50 rollback
MANILA - President Arroyo convinced oil companies to trim diesel prices by P1.50 to help ease the pain of surging inflation.
Diesel pump prices were rolled back effective midnight Sunday, Press Secretary Jesus Dureza told reporters after Arroyo met with oil industry executives.
Shell Philippines and Petron Corp. led the rollback, Dureza said, adding that he hoped the other oil companies will follow suit.
Oil firms have been jacking up prices almost weekly, and the largest increase so far in diesel prices, at P3 per liter, took effect last Saturday.
Dureza also said oil companies, despite agreeing to a rollback, will still need to explain to the government and the public any increases or adjustments in their pump prices.
Executive Secretary Eduardo Ermita, on the President’s orders, called up Shell country chairman Edgar Chua and Petron chairman Nick Alcantara last Saturday.
“They will roll back effective midnight tonight (Sunday), a rollback to P1.50 from the (increase of) P3 that had just been announced less than 48 hours ago,” Dureza said.
He added that the rollback will go a long way in cushioning the impact of the high prices of diesel on the masses.
Dureza clarified that the negative 38 percent satisfaction rating of the President had nothing to do with her decision to make an appeal to the oil companies. She makes decisions that are good for the country regardless if these are popular or not, he added.
He attributed the appeal for a rollback to “very pro-active work by the President.”
Petron spokesperson Virginia Ruivivar said they agreed to slash their diesel prices—barely two days after implementing a P3 hike—because it is difficult to turn down a request that directly came from the President.
But she also said Petron could not “operate at a loss” for long, adding that with the P1.50 rollback they now have an under-recovery of P4 per liter of diesel.
“It’s a question of moderating the adjustment. So in time we will fully recover our cost. We cannot operate at a loss,” she said.
Ruivivar confirmed that prices of diesel in the world market have started to go down in the past four days, for an estimated total of US$16 per barrel, but that compared to the June rates for diesel, it is still US$9 higher per barrel.
Dureza added that oil firms could not simply lower their prices once the global prices go down since it is likely that their current supply was bought when prices were still high.
Below levels
Oil industry officials have said the increases are unavoidable and that local prices are still below global levels. Diesel and gasoline prices have gone up 19 times this year, while kerosene prices have increased 20 times.
The Philippines imports all of its oil requirements. It was unclear how long the diesel pump prices would be maintained at the reduced level.
Government continues to draw up measures to further soften the impact of the high prices of oil, including doing a day-to-day review of the factors that may contribute to the hike like the value-added tax.
He declined to comment on an appeal of the transport sector for another fare adjustment, except to say that offices like the Land Transportation and Franchising Regulatory Board (LTFRB) are “tasked to make a study, and dialogue and get inputs.”
Dureza said militant groups are also free to stage their own demonstrations, including a campaign to boycott petroleum products on Aug. 23.
“They’re entitled to their own opinion. Let them do what they wish; we are a free country,” he added. (Sunnex)
