MANILA, Philippines ? (UPDATE) Two days after Malacañang lifted the price cap on petroleum products, Eastern Petroleum Corp. raised its pump prices of diesel by P2 a liter, gasoline (premium, unleaded, regular) by P1.25 a liter, and kerosene by P1.50 a liter.

The price increase has been set to take effect at 12:01 a.m. on Wednesday, said Eastern Petroleum chair Fernando Martinez.

Martinez, however, said that Eastern Petroleum had yet to determine when the second and third round of increases would be implemented.

"Ideally, the price increases should be implemented weekly, but it's still up to the market forces, since we are in a deregulated market. If prices in the world market fall, for instance, then the increase (will be offset)," he said.

Oil industry executives earlier said that under-recoveries stood at P4 to P5 a liter due to the implementation of Executive Order No. 839, which froze prices of petroleum products in Luzon at their Oct. 15 levels.

On Monday, President Macapagal-Arroyo lifted the cap on fuel prices through EO 845, as she directed a task force to implement the package of proposals promised by oil players, including discounts and staggered price adjustments, in Luzon.

Martinez, also the chairman of the Independent Philippine Petroleum Companies Association, earlier assured the public that the oil companies would not recoup their under-recoveries in one blow.

Recovery would likely be implemented in three installments as competitive forces would ultimately determine where fuel prices would go after the lifting of EO 839, Martinez had said.

An industry source said several gas stations along Shaw Boulevard, Camarin, Molino in Cavite, Mabalacat in Pampanga, Commonwealth, among others, have raised prices of diesel between P1.45 and P2 a liter.

This had brought prices of diesel in these areas to at least P30 a liter as the smaller independent players in the area similarly hiked their prices, the source added.

According to the source, a major oil firm has raised its prices in Mabalacat, while another did likewise in Molino.

Meanwhile, Martinez said that he expected Eastern Petroleum to return to its normal operations within 20 days' time.

"Over the next 15 days, we have orders coming in. Some of our stations still have limited supply, similar to what's happening with other oil companies. We also have contractual obligations, so that's one of our priorities. But in 15 to 20 days at the most, we could restore normalcy (in our operations), especially if prices will be normal, so that there's an incentive to sell," Martinez explained.

As of Nov. 16, data from the Department of Energy showed the regional benchmark Dubai crude had climbed to an average of $78 a barrel, from an average of $73 a barrel in October.

The price of unleaded gasoline based on the Mean of Platts Singapore (MOPS) benchmark for refined petroleum products likewise increased to an $81-a-barrel average as of Nov. 16, from last month's average of $78 a barrel.

Meanwhile, MOPS-based diesel rose to an average price of $85 a barrel in the Nov. 1-16 period, from $80 a barrel last month.