The oil companies will likely implement a price rollback next week due to the softening of world oil prices, industry sources said during the weekend.
Laban Konsyumer Inc. president Victorio Dimagiba said international movement of oil prices indicated a possible downward trend as confirmed by an oil player.
READ: Inflation rate decreased below 1% in September
“According to one oil company rollback of diesel indicative ranges P0.85 a liter to P1.10 a liter. Gasoline should rollback by P0.75 to P1 per liter,” Dimagiba said.
An oil industry official, for his part, said there were no final figures as of press time but said initial reports indicate a price rollback.
This will be the second consecutive oil price rollback as oil firms cut the price of gasoline by P1.45 to P1.55 per liter and diesel by P0.50 to P0.60 per liter from Sept. 29 to Oct. 1.
Meanwhile, the Energy department has ordered 13 oil companies to explain why their oil price rollback was lower than government computations and why their increase in the price of cooking gas was higher than expected.
“Our actions support our mandate to protect consumer welfare and ensure fair oil industry practices,” Energy Secretary Alfonso Cusi said.
“The SCOs [show cause orders] would provide these companies the opportunity to explain how they arrived at their respective oil price rollback calculations,” he said.
The department declined to name the 13 oil companies but gave them until Oct. 7 to formally respond to the government order.
Energy Assistant Secretary Leonido J. Pulido III said the oil companies implemented a lower price cut than what was computed by the department.
While the oil firms cut the price of gasoline by P1.45 to P1.55 per liter and diesel by P0.50 to P0.60 per liter early this week, Pulido said by their calculations, the oil firms should have cut gas prices by 22 centavos more for gasoline and six centavos more for diesel.
“We want them to explain it; we are not saying they are wrong,” he said.
Pulido added that for liquefied petroleum gas, the oil companies raised prices higher than the world market.
“We’re also asking LPG suppliers and importers to explain in three days,” he said.
The oil companies raised the price of LPG from P3.98 a kilo to P4.50 a kilo effective 12:01 a.m. Oct. 1.
“We were just surprised. Historically, our computations would match. It prompted us to ask them to explain. This is the first time over the last three years. We really want to hear [from them] in the next few days,” Pulido said.
In a related development, Deputy Minority Leader and Bayan Muna Rep. Carlos Isagani Zarate on Friday said the reported 0.9 percent inflation rate for September “does not mean that the prices of basic goods are now lower.”
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“Truth to tell, it only means that there is a minimal increase in the prices of goods last month, but, the prices remain high since the banner 6.7 percent inflation rate last year,” Zarate said.
According to Zarate, what consumers want to hear is the lowering of prices and not just the rate of inflation.
“As it is, even if we have a zero inflation last month, it only means that there is no price increase, but, prices are still high, nonetheless,” he said.
“The government should not crow about this because it is even slow in addressing the many issues hitting consumers now like the worsening health crises, the African Swine Fever, killer low palay price for impoverished farmers, oil price hikes and impending water rate increases,” Zarate said.
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For his part, Deputy Speaker Conrado Estrella of ABONO Party-list group aired his optimism that the inflation rates would plunge a little deeper as consumers start to reap the benefits of the Rice Tarrification Law.
“The urgent job at hand is to immediately put in place measures that will lessen the impact of Rice Tarrification Law to our farmers. Together with the Department of Agriculture, we are doing this now,” said Estrella.
Estrella said emergency cash assistance for affected rice farmers will be distributed within the month in provinces like Pangasinan.
“Starting next week, we will visit small rice farmers, distributed their cash assistance and explain to them the benefits and advantages of the Rice Tarrification Law, which is far from what they are being made to believe in,” said Estrella.
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