MAR: DOE, DoF, DTI MUST WORK
TOGETHER TO MITIGATE OIL PRICE HIKES
OPTIONS INCLUDE HEIGHTENED MONITORING, REVIEW OF DUTIES ON OIL

Senator Mar Roxas today called on the Departments of Energy (DOE), Finance (DOF), and Trade & Industry (DTI) to work on a menu of options to deal with the rising cost of petroleum products.

The chair of the Senate trade and commerce committee said the government's menu of options include calibrated responses such as intensified price monitoring activities and lowering of tariffs on imported oil products.

"I urge the three departments to carefully plan and calibrate our responses so as not to undermine existing gains in the economy and financial markets. But let's look at all necessary tools to shield our people from additional financial worries due to higher oil prices," Roxas said.

"Sa bawat taas ng presyo ng langis at LPG, namemeligro ang napakaliit nang kita ng ordinaryong manggagawa. Wala nang ihihigpit ang kanilang sinturon," he added.

"Dapat lamang na manguna ang pamahalaan sa pagtingin sa kanilang kapakanan, lalung-lalo na laban sa mga nais magsamantala sa kanilang paliit nang paliit na kita," he stressed.

Roxas further stressed that the DOE should already exercise its visitorial powers under the Downstream Oil Deregulation Act to ensure that any price adjustment is fair.

He also called on the DTI to work with various consumer groups to ensure that retail LPG prices are fair and the quality of LPG sold to the end-consumer is not compromised. Furthermore, he said price watch teams should closely monitor the effect of these price hikes on the prices of consumer goods.

Roxas added that there is a need to look into the current menu of options available to the government, if these could provide adequate cushion. If not, "then let's find out what's missing and let's put this in place, so we will be more prepared to absorb price shocks coming from abroad."

He noted that there is an existing Executive Order 527, which sets guidelines on the increase or decrease of import duties on crude oil and petroleum products, depending on world oil prices. At present, the customs duty on oil and petroleum products is set at 1% as per the EO. Duties would be cut to 0% if the price of Dubai crude increases to $85 per barrel and MOPS (Mean of Platts Singapore) Diesel to $88 per barrel.

"We want to make sure that consumers are not taken advantage of by unscrupulous traders given a series of oil price hikes. The right of consumers to fair price of quality goods must go hand in hand with the right of enterprises to earn profits," he stressed.

"Any increase in the price of LPG and kerosene upsets the household budget for food and other essential needs. Meanwhile, increases in gasoline and diesel reduce the take-home pay of our workers, and give imprimatur-whether justified or not- for traders to hike prices of other consumer goods," he explained.

On Saturday, oil firms hiked pump prices of gasoline, diesel and kerosene by 50 centavos per liter. This brings pump prices to roughly P42.45, P37.99 and P36.95 per liter of gasoline, diesel and kerosene, respectively.

Liquefied petroleum gas (LPG) was up by 56 centavos a kilogram or P6.16 per 11-kilogram cylinder, to a wholesale price of P26.89 per liter. This means the dealers' pick-up price per 11-kilogram cylinder must be roughly P529.14.

The net price increase this year is P5.20 per liter of gasoline; P3.70 per liter of diesel; P3.20 per liter of kerosene and P3.30 per liter of LPG. This latest oil price hike is the 14th this year for gasoline, 11th for diesel and kerosene, and 13th for LPG.

The present level of prices is higher than the prices in end-October of last year by 1.2% for gasoline, 10% for diesel, 6% for kerosene and 15% for LPG.

The recent price hike comes after world crude oil prices have hit a record-high of $90 per barrel ($78.81 per barrel of Dubai crude), and after the international contract price of LPG has increased to $652.50 per metric ton this month.