Tuesday, October 07, 2008 Cabaero: Saga of LPG prices By Nini B. Cabaero Beyond 30
WHILE we were not looking, or while we were content that the weekly oil price adjustments have stopped, here come liquefied petroleum gas (LPG) dealers increasing their prices without warning.
LPG prices rose by P2 per kilogram over the weekend. This prompted the Department of Energy to question the justification for the price adjustment in view of the decreasing costs of oil products in the international market.
Press Secretary Jesus Dureza joined the fray when he called last Sunday for a review of the latest increase to see if the adjustment was “fair and just.”
He said government is aware that market forces dictate such prices but dealers and manufacturers are not to take advantage of consumers. “Government must always be there,” he said, vigilant and consistent in watching over the welfare of consumers.
He made no mention of what Malacañang, through the Department of Energy, would do to those who took advantage of consumers in this latest adjustment in the cost of LPG, the fuel used in millions of households to cook food and used by hundreds of taxi units whose engines were converted to run on LPG instead of the more expensive diesel or gasoline.
The LPG price hike was glaring because the expectations of government and consumers have been for prices of fuel products, including LPG, to go down further or to remain constant. Prior to this latest increase, some public transport specialists were eyeing the removal of the P10 add-on fare in taxis since most of these units run on LPG anyway.
But with this sudden jacking up of the LPG price, lowering taxi fares would not happen soon.
The Liquefied Petroleum Gas Marketers Association (LPGMA) said Monday that the big oil players were to be blamed for the price adjustment. LPGMA president Arnel Ty said small dealers merely followed the P2/kilo price increase set by their suppliers last Oct. 1, according to a www.abs-cbnnews.com report.
The same report quoted Ty as saying that, since Sept. 26, the “big three” oil companies in the Philippines—Petron Corp., Pilipinas Shell Petroleum Corp. and Chevron Philippines (formerly Caltex)—have not been selling them their volume requirements, resulting in supply problems. Ty said association members were forced to get their supply from Liquigaz Philippines Corp.
While supply and demand in the market usually determine the price of LPG and other fuel products, the problem starts when suppliers force an increase in demand by holding back on output. Then it would appear that the so-called cartel of the three big players rears its proverbial ugly head again.
This had always been the challenge to government regulators. That they keep a close watch not only of the prices of fuel products but also of the goings-on of the industry so consumers would not fall victim to unbridled greed and not be prey to unjust corporate machinations.
When Dureza spoke of being vigilant and consistent in monitoring prices, it should mean not only reacting to the adjustments in prices but also taking measures even before another burden is passed on to consumers.
