Continuous oil price rollbacks, uncertain
By Nidz Godino
“The pandemic worsened in China which resulted in new lockdowns…so economic activity weakened in China…there was an earthquake in Japan, the 2 refineries there are now running,” Energy Undersecretary Gerardo Erquiza said another massive oil price rollback may or may not continue in the coming days, because global oil price market is “very volatile.” Regina Capital managing director Luis Limlingan, in an interview of media, said the current geopolitical scene is factor.
Bank of the Philippine Islands (BPI) economist Jun Neri, said oil prices will remain expensive as long as there is no ceasefire and de-escalation between Russia and Ukraine.
In a Laging Handa public briefing Erquiza said aside from Russo-Ukrainian conflict, other factors are behind volatility of oil prices.
He noted that current COVID-19 surge in China, as well as recent magnitude 7.4 earthquake in Japan, may have also had a hand in the major oil price rollback.
“Things were OK last week, but now we were told nothing much has happened, so we do not know how this will affect oil prices this coming week,” he added.
But Erquiza clarified that because of oil deregulation in the country, the Department of Energy (DOE) cannot predict movement of oil prices.
“What we can do now is to monitor implementation of oil price adjustments, and to call for an amendment in the law to unbundle oil prices…we want to see reasons behind oil price movements.,” Erquiz added.
Earlier , House Committee on Energy approved a bill to amend the oil deregulation law, with the approved measure seeking to “unbundle” the price oil.
Marikina City 2nd District Rep. Stella Quimbo earlier said with unbundling, there will be transparency among oil companies whenever they adjust their prices.
Several firms have announced major oil price rollback to be implemented on Tuesday, the first in 2022, lowering rates of diesel by P11.45 per liter, gasoline by P5.45 per liter, and kerosene by P8.55 per liter.
A measure seeking to mitigate effects of soaring oil prices has hurdled at the committee level of the House of Representatives.
This was after the House Committee on Energy on Tuesday approved a substitute bill amending Republic Act 8749, more known as the “Downstream Oil Industry Deregulation Act of 1998.”
In a Laging Handa press briefing on Wednesday, Marikina City 2nd District Rep. Stella Quimbo said measure would help prevent oil companies from “overpricing” petroleum products, amid ongoing war between Russia and Ukraine.
Quimbo noted that the approved measure sought to “unbundle” price of oil, a move ensuring there is transparency among oil companies whenever they adjust their prices.
“Our oil companies have inventories of their own… fuel products that they sell right now were most likely bought at lower prices 2 to 3 months ago…unbundling seeks to prevent that…if every oil company has 30 days of inventory, it must also take 30 days for oil price hikes to take effect,” Quimbo said.
She added that under the House measure, public can tell if oil price adjustments are justified, as it is possible for some oil companies to take advantage of Russo-Ukrainian conflict to hike their prices.
” If oil prices rise in the world market today, oil companies shouldn’t pass on the burden to consumers on the same day because their pumps contain fuel that they bought 30 days ago,” she further pointed out.
On Tuesday, fuel companies implemented a massive oil price hike, with prices soaring up to P13.15 per liter for diesel, P10.50 per liter for kerosene, and P7.10 per liter for gasoline.
CleanFuel, meanwhile, implemented rollback of its diesel products at some of its branches in Metro Manila and Luzon from March 16 to 18,2022.
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