Friday, August 06, 2004 Oil prices to remain high: energy chief
MANILA -- Energy Secretary Vicente Perez Jr. said Thursday that high prices of oil in the Philippines were caused by external forces, such as the rising Dubai crude price, and would remain that way until the end of the year.
As Dubai crude prices rose to a 13-year high, Perez warned companies Thursday that his agency would go after those taking advantage of the soaring oil prices.
"The DOE will run after individuals and companies that will resort to unscrupulous practices particularly unfair practices or pricing especially during this very crucial time in the industry. I'd like to stress that illegal practices will not be tolerated and that the DOE will strictly monitor the industry to protect the oil consumers," Perez said in a press briefing in Malacaņang.
Perez called for more public vigilance against unusual illegal pricing and appealed to other sectors to refrain from clouding the issue with wrong information on the oil issue.
He said the soaring oil prices in the Philippines were caused by the rising cost of crude in the world market.
Perez said the Dubai crude price, which has gone up by 20 percent in the past 12 months, reached a 13-year high Thursday at US$37.70 per barrel. He said prices today are higher than those at the height of the Iraq war in 2003, the Kuwait invasion in 1990, and the production cutback in 2000.
He attributed the oil price increases to the US warnings against heightened terrorist attacks, pipeline sabotage in Iraq, disruption of oil exports from Russia, China's growing demand for oil, refinery cutbacks in South Korea, and the start of stockpiling for the winter months by countries in the northern hemisphere.
He said there is no oil crisis and that the Philippines problem is pricing, not supply. He said the country has sufficient supply until October, with a 56-day inventory of which 42 days are in the country and the rest are on the way.
Perez said it will do no good to buy back Petron because this will not lead to a reduction in the price of oil
Government is comfortable with its 40 per cent share in the company, he stressed.
"We believe this is just enough participation for us to have an influence in the oil market," he said.
He said Petron has not followed the example of Caltex and Shell and the new oil players who raised their prices. "It's obvious they are trying to balance the interest of the public as well as their corporate interest," he added.
He said the government has not implemented Executive Order (EO) 336, which raised the tariff on petroleum products from 3 to 5 percent as a consequence of soaring world prices. He said EO 336 will only take effect once prices have gone down.
Perez said government could help transport groups set up their own gasoline stations so they could buy diesel at wholesale prices. He said the DOE can provide training on operating pump station and marketing and lend capital from the P30 million that it has, which would be complemented by P50 million from the Philippine Amusement and Gaming Corp. JMR
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