Thursday, October 09, 2008 Malig: No oil price rollback? By Jun A. Malig Cognition
AS IF to make the public believe that they have social conscience, some oil companies announced on Tuesday that they will not be imposing any increase in the prices of gasoline and diesel this coming weekend.
What are they talking about? In the first place, they're not supposed to raise the prices of their products. In fact, they still have to rollback their prices by a few pesos per liter.
In the Senate and the House of Representatives, some lawmakers have asked Malacaņang to compel oil companies like Shell, Petron, Chevron, and Total to bring down the prices of their petroleum products by P5 more per liter.
The call was made after the National Economic and Development Authority (Neda) asked oil companies that they should lower the prices of their gasoline and diesel by at least P5 per liter.
Senator Ramon Revilla Jr. wants the Department of Energy to explain its "inaction" amid the decreasing prices of oil in the international market. He said the lack of an oil price rollback this past week is a big question mark to the public.
The senator has criticized the profit-oriented oil companies for their refusal to roll back the pump prices of their products.
Recently, the Consumer and Oil Price Watch (COPW) disclosed that oil companies have been overcharging oil prices by P8 per liter.
COPW has computed, for instance, that imported diesel should cost only P36.43 per liter, using the average price of four-week inventory, instead of P44.62 per liter, which was asserted by the local oil companies.
Revilla noted that the price of gasoline was only P47.96 per liter and diesel P40.94 per liter last April when the Dubai crude price was around US$103 or P4,327 (at US$1 to P41.82 exchange rate) per barrel.
Currently, he said, the price of gasoline is P50.07 per liter and diesel P48.98 per liter while the average Dubai crude price is just US$90 or P4,233 (at US$1 to P47.04) per barrel.
The facts and figures presented by the senator, coupled with the observation and calls by Neda and COPW, are a lot clearer and make more sense than the reasons and justification of the profit-hungry multinational oil companies.
Latest data from the US government's Energy Information Administration show that from Asia Dubai Fateh Spot Price of US$121 per barrel in the first week of August 2008, the price went down to only US$94.03 per barrel in the last week of September 2008.
In the first week of September, the price was US$106.19; second week US$98.99; and third week only US$89.62 per barrel.
Wednesday's Tokyo Commodity Exchange's report on crude oil spot reference price show that October 7, 2008 Dubai and Oman average price was only US$77.98 per barrel. This definitely means a lot more profit for oifirms and the need to reduce the prices of their products by more than P5 per liter.
I don't know how the noble-hearted oil companies in our country compute their purchases vis-ā-vis their sales and huge profits. But I'm sure Neda and the COPW have more realistic computations.
By the way, Senator Chiz Escudero has proposed to amend the Oil Deregulation Law to give the government the power to compel oil companies to reduce the prices of their products to reflect the real situation in the world market.
He said despite the slipping down below the US$90 per barrel -- which went down further to only US$77.98 per barrel Wednesday -- in oil price, oil companies in the country have decided not make further reduction in the pump prices of gasoline and diesel.
