Oil price intervention sought

The consumer group Laban Konsyumer Inc. urged the Energy department to intervene in the pricing of oil products to protect the interest of consumers from the hefty increase of as much as P2.35 per liter effective Tuesday, the second consecutive weekly price increase.

READ: Big-time oil price hike in the offing

“On prices, the Department of Energy should intervene that existing inventory products are priced at their pre-Saudi oil incident. The oil industry must not take advantage of a force majeure situation at the expense of the consumers,” LKI president Victorio Dimagiba said.

“The DOE is clothed with powers under the Oil Deregulation law to take affirmative action for the interest of the consumers,” he added.

Unioil Philippines and Pilipinas Shell are among  the country’s oil firms that have announced a big time oil price hike of as much as P2.35 per liter to reflect the impact of the Saudi Arabia drone attack.

Shell said it was raising its pump prices by P2.35 per liter of gasoline, P1.80 per liter of diesel, and P1.75 per liter of kerosene.

Unioil for its part urged motorists to load up accordingly. “Expect fuel prices to go up next week [September 24-30, 2019]. Diesel should go up by P1.70-P1.80 and gasoline should go up by P2.20-P2.30, “ Unioil said.

The oil firms said pump prices could have gone up further, but fortunately Saudi Aramco announced that it will be able resume production, thus tempering worries of tightness in global oil supply.

On Sept. 17, most oil companies implemented a price increase of P1.35 per liter of gasoline, P0.85 per liter of diesel and P1 per liter of kerosene.

READ: Drone hits spark fires at Aramco oil depots

The Energy department reconvened with the proposed members of the Oil Contingency Task Force on Sept. 20 to finalize the working draft establishing an inter-agency working group that will implement contingency strategies in view of last week’s drone attacks on Saudi Arabia’s state-run Aramco oil processing facilities in Abqaiq and Khurais.

Energy Undersecretary Donato Marcos and DOE spokesman Felix William Fuentebella co-chaired the meeting, while Oil Industry Management Bureau Director Rino Abad led the presentation on the country’s current oil supply.

“We realize the importance of addressing issues beforehand so that the government may have contingency measures to sustain the country’s economic growth and provide basic services to the people,” Energy Secretary Alfonso Cusi said.

“The activation of the OCTF is vital to our resiliency because we are currently dependent on oil imports.”

In a separate meeting, the Energy department called on oil industry players to talk about the effects on world oil prices that may affect the country’s economy.

The discussions revolved around the strict implementation of the Minimum Inventory Requirement, which is equivalent to stocks of 30 days for oil refiners, 15 days for bulk marketers and seven days for liquefied petroleum gas players.

A proposal to increase the MIR to 60 days was also raised, but the oil representatives said the immediate creation of additional infrastructure along with the added logistical demand may prove costly and detrimental to current operations.

As for oil prices, the Energy department explored the possibility of staggering oil price increases. The oil players took note of the proposal and said that, based on indicative figures in the world oil market, pump prices remain lower than the 2018 figures even with the 2019 tranche of the TRAIN law in effect, and that the country as a whole is affected by world oil price volatility.

Other possible contingency measures raised were the preparation of oil supply replacement and a possible increase in the biofuel blends as an option to mitigate potential supply shortages.

READ: Oil price upsurge seen at P1.3/liter

READ: PH oil supply adequate—Cusi

Topics: Laban Konsyumer , Department of Energy , Oil Deregulation law , Victorio Dimagiba , Minimum Inventory Requirement
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