Palace wants more oil price rollbacks
By Michael Lim Ubac
Philippine Daily Inquirer
First Posted 17:01:00 10/04/2008
MANILA, Philippines -- The public is still entitled to further rollbacks in pump prices of gasoline and other petroleum products even after Malacañang reimposed the one-percent tariff on oil at the start of the month.
Press Secretary Jesus Dureza told dzRB radio on Saturday that the oil companies -- big or small -- could not use the oil tariff as justification for quickly ending the series of oil price rollbacks triggered by the continuing softening of world oil prices.
Dureza said Socioeconomic Secretary Ralph Recto believed that the public was still entitled to more cuts in the prices of gasoline and diesel, among other petroleum products.
“The oil companies have to reduce prices further,” said Dureza, citing the clamor of motorists and transport groups for more price adjustments. He did not specify any amount but said the price cuts that could be made were “hefty.”
Based on his computations, Consumer and Oil Price Watch chair Raul Concepcion said oil firms still need to roll back petroleum prices by more than P8 per liter.
“But you know, these will have to be looked into, but we always say that the market forces will determine all of these. So other companies have already rolled back prices. As for those who refuse, well, let the people go to the gas stations that have lowered their prices,” Concepcion said.
Dureza explained that the tariff on oil was nothing new.
“That was already been agreed to be implemented some time ago (but was suspended) when the price of oil in the world market jacked up. The tariff arrangement was not only imposed now. That was a schedule that was agreed upon before,” he said.
If the price of crude goes up to $140, the government removes the tariff so as not to unduly burden the consumers, he said, quoting a presidential order issued by the President this year.
But Dureza said that if crude prices go down to the $90-per-barrel level ($90-$100), government will have to reimpose the tariff.
“Automatically that will be imposed and if it will further go down to $80, tariff level will increase (further). So the oil companies are not really honest in saying that they can't roll back prices because of the tariff imposed on oil. That had already been the schedule that was put in place at the time the global price of fuel was very high,” he said.
The original three-percent tariff on oil was temporarily removed in June by President Arroyo when global prices breached the $135 per barrel ceiling, sparking weekend increases in the pump prices.
But it was returned after oil prices fell way below the $103 benchmark for Dubai crude last week ($96.49 per barrel).
Oil fell to $97 a barrel on Thursday, after the United States Senate's approval of a $700-billion bailout of America's financial institutions.
Oil prices further fell to $93 a barrel Friday in Asia as light, sweet crude for November delivery was down 52 cents to $93.45 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.
Arroyo’s economic management team said it was mulling a review of the oil tariff.
At a press conference with other officials, Finance Secretary Margarito Teves said he was open to a review of the guidelines following calls from transport groups, oil firms, and senators against the reimposition of the tariff.
Eastern Petroleum Corp. and other smaller oil firms warned that the tariff could result in an additional 25 to 30 centavos per liter of gasoline, reversing the series of rollbacks implemented by oil companies due to downward adjustments in oil prices abroad.
"What we can do is review these guidelines. The direction is to help public but at the same time, the government should not suffer a loss.”
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