Unleaded gas shoots past P54 per liter

MANILA, Philippines—For the third time in eight days, fuel prices went up on Tuesday morning as fighting in Libya escalated and unrest in the Middle East persisted.

Oil firms raised prices of regular unleaded gasoline and diesel by P1.50 a liter and of kerosene by P1.25 a liter.

Unleaded gasoline is now retailed at more than P54 a liter and diesel at P45.55 a liter in Metro Manila.

Since the beginning of the year, oil firms have implemented eight rounds of price increases, resulting in a total increase of P6.75 a liter for gasoline and P6.50 for diesel.

This week’s price movements were again due to an increase in the prices based on the Mean of Platts Singapore (MOPS) benchmark for refined petroleum products.

MOPS-based gasoline prices rose to $120.74 a barrel last week from the previous week’s level of $116.8 a barrel, diesel prices increased to $129.50 a barrel from a week-ago level of $123.42, Energy Secretary Jose Rene D. Almendras said.

Based on the formula being followed by oil firms, a $3-per-barrel increase is equivalent to a P1-per-liter hike in the price of a petroleum product.

Potential food crisis

Days after forming a committee to ensure the country’s continuous fuel supply, Malacañang on Tuesday announced that President Benigno Aquino III would meet next week with officials to tackle a potential food crisis.

Presidential spokesperson Edwin Lacierda made the announcement after Sen. Edgardo Angara warned of a food crisis caused by the conflict in Libya and the unrest in the Middle East.

“For the moment, there is no crisis,” Lacierda said at a news briefing.

“However, the President will be meeting with (Agriculture) Secretary (Proceso) Alcala, (National Food Authority Administrator) Lito Banayo and (Budget Secretary Florencio) Abad next week after his arrival to discuss the food situation and rice supply,” he added.

Lacierda said the three officials were expected to raise the concerns of some senators over food supply when they meet the President next week after his state visits to Indonesia and Singapore.

He said the National Food Authority had already briefed Mr. Aquino on the country’s rice supply. The NFA on Monday said it would import 860,000 metric tons of rice for 2011.

World food prices

Consumers around the world are facing not only rising fuel prices but also surging food costs.

Prices of major grains were up by at least 70 percent from February 2010, according to the UN Food and Agricultural Organization (FAO).

Food prices have risen to record highs due to increasing demand, high oil prices and poor production yield, the FAO said.

The FAO price index averaged 236 points in February 2011, up 2.2 percent from January and the highest (in both real and nominal terms) since January 1990, when the United Nations started the measurement.

The index, which has been registering new highs for the past eight months, breached the 213.5 points recorded in June 2008 at the height of the food crisis.

Prices of major staples such as grains, rice, wheat and maize have been rising since last year, the FAO said.

The FAO Cereal Price Index averaged 254 points in February, up 3.7 percent from January and the highest since July 2008.

Of all the commodities monitored—dairy, oils and fats, meat, and sugar—only the sugar sector saw a slight decrease. The rest registered price increases.

The FAO recently said that the global cereal supply would tighten this year due to growing demand and poor harvests.

Local prices

Despite warnings of food shortage and the series of fuel price increases, there has been no increase in the prices of vegetables, rice, pork and poultry in the country, according to Agriculture Assistant Secretary Salvador Salacup.

“Agricultural commodities are very stable. We see movements on the positive side,” Salacup said Tuesday.

The prices of sugar and onions have even gone down, he said.

“The ongoing milling of sugar eased the supply shortfall experienced in the previous months. The supply improvements accounted for the P3 per kilogram price cuts at wholesale for both refined and brown sugar,” the Bureau of Agricultural Statistics (BAS) said.

The agency based its observation on the prices of commodities for the week ending on March 4. It added that the price of onions had gone down due to a large supply.

The white onion price was off by P5 per kilogram from the P30 prevailing price last week, while Red Creole was sold at P42 per kilogram, cheaper by P28 compared with last week’s quotation, the BAS said.

Low demand

Although certain factors can affect the prices of commodities, these have been offset by low demand, Salacup said. “Even if they increase, it won’t be as much because demand is low,” he said.

This was also the observation of the BAS. “Prices of basic food items such as rice, chicken, meat and cooking oil remained stable considering the sufficient supply coupled with slow market absorption,” it said.

The product that could see a price increase is cooking oil, Salacup said. This was due to the reduced volume of copra, which is down by 5 percent.