MANILA, Philippines—The Department of Energy wants a more substantial reduction in the price of liquefied petroleum gas—a one-time cut by another P191 a cylinder, on top of the P44 a cylinder undertaken earlier this week.

Also, oil firms have started to slash gasoline prices by P1 to P2 a liter, and kerosene prices by P1 a liter, on Friday and Saturday.

In a meeting with LPG industry stakeholders on Friday, Energy Secretary Angelo Reyes almost lost his temper when he told suppliers that the drop in the international contract price of LPG from $804 per metric ton (MT) in October to only $490 per MT this month should result in an equivalent rollback of P235 per 11-kilogram cylinder.

Earlier this week, cooking gas suppliers slashed the price of liquefied petroleum gas by P44 a cylinder. But Reyes said that LPG suppliers owed it to consumers to roll back prices by another P191 a cylinder.

“We expect LPG prices to reflect the drop in the contract price by 39 percent this month. I want the rollback done soon. I don’t want to reach the limit of my patience,” Reyes said, visibly trying hard to maintain his composure while stressing his point.

At 10 p.m. Friday, Seaoil Philippines Inc. was the first to cut prices by P2 a liter for gasoline, and P1 a liter for kerosene.

Petron Corp., Pilipinas Shell Petroleum Corp., Chevron Philippines Inc. and Flying V all reduced gasoline and kerosene prices by P1 a liter at 12:01 a.m. today.

Total (Philippines) Corp. and Eastern Petroleum Corp. followed with the same price cut at 6 a.m.

The oil companies implemented price reductions to reflect the continued softening of world oil prices.

According to data from the Department of Energy, the regional benchmark Dubai crude had dropped to only $58 a barrel as of Nov. 4, from $67 a barrel last month.

The price of unleaded gasoline based on the Mean of Platts Singapore (MOPS) benchmark for refined petroleum products also fell to $59 a barrel in the first four days of November, from the $80-a-barrel average in October.

MOPS-based diesel also settled at $82 a barrel in the first few days of November, down from last month’s $82-a-barrel average.

This price reduction was the 14th for gasoline, for a total of P16.50 a liter, and the 12th for kerosene, for a total of P14.50 a liter.

With the present rollback, the price of premium unleaded gasoline now ranges from P41.56 to P45.15 a liter, and of kerosene from P45.45 to P48.80 a liter.

Reluctance

During the meeting with LPG stakeholders, Reyes pointed out that when contract prices were on an upswing, suppliers were quick to adjust their prices accordingly. But when international prices were going down, they were reluctant to immediately reduce per-cylinder prices.

But an industry source said the drop in the November contract price should only result in a corresponding rollback of around P180 per cylinder, or P15-P16 a kilogram.

“Considering foreign exchange and the drop in the contract price this month, the total rollback should be around P180 per cylinder,” the source said. “Some LPG suppliers are still selling stock that were bought at a higher (contract price).”

An oil company executive, who requested anonymity, agreed with the source, saying shipments of lower-priced LPG have yet to be sold in the market. In fact, local LPG suppliers still have some under-recoveries from earlier this year.

“There were instances in the past when we weren’t able to recover our under-recoveries,” the executive said. “At this time, I think the reduction that we have yet to reflect is only P10 per kilogram, since we have already cut prices by P4 a kilogram earlier this week.”

‘Acceptable and fair’

In a separate interview, Petron Corp. public affairs manager Virginia Ruivivar said consumers could expect more LPG rollbacks in the coming weeks, but most likely not in the magnitude that the DoE wanted.

“We’re reflecting part of the (contract price drop) now, and we’re going to continue implementing reductions,” she said. “In time, we’ll reflect the full impact of the decline in contract price.”

On the part of the smaller dealers, LPG Marketers Association president Arnel Ty said they could not really do much since they were dependent on how their suppliers priced their product.

However, he said the “acceptable and fair” amount that should be given back to consumers would be just around P15 a kilogram—P4 of which had already been implemented earlier in the week.

“But we think we can still implement a rollback over the weekend, and probably another one on Monday,” he said. “We’re looking at another P10 a kilogram.”

Reyes paid particular attention to bulk LPG supplier Liquigaz, which provided most of the LPG supply of LPGMA member-companies.

If local LPG suppliers would not comply with the DoE’s directive to reflect lower prices as soon as possible, Reyes said, energy officials would scrutinize each of the suppliers’ books.