DOE eyes more rollbacks at pumps

The Department of Energy expects more rollbacks in pump prices in January because of low crude costs last month.

Energy Secretary Angelo Reyes, during an interview with reporters on Monday, said the government anticipates the monthly price cuts on fuel products implemented by oil companies in the second half of 2008 to continue early this month.

But Reyes declined to say by how much the companies should lower their prices, saying only that the drop in crude costs in December should warrant more rollbacks from them.

“The average for December was about $40 per barrel against the November average of about $50 per barrel . . . so for January, because of the low monthly average for December which is our reckoning point, we could reasonably anticipate more reductions in oil prices, and that would be for diesel, gas and kerosene,” he said.

Based on data from the Energy department, the prevailing domestic prices in Metro Manila of fuel products as of December 20 had been ranging between P30.97 and P37.10 a liter for unleaded gasoline; P29 and P33.48 a liter for diesel; P37.50 and P46.15 for kerosene; P19 and P22.80 for autogas; and P380.00 and P464 for an 11-kilogram cylinder of liquefied petroleum gas (LPG).

These prices were a significant drop from when world oil prices peaked in the middle of last year, triggering a spate of price hikes at pump stations across the country.

Since then, however, crude prices —as well as local pump prices— have tapered off substantially on the back of the global financial crisis weakening demand for the commodity from large economies worldwide.

Silent government

Despite the falling crude prices, the government remains silent on any further price cuts in the succeeding months especially after recent events in oil-producing countries that were expected to influence prices. The violence in Israel over the Gaza Strip, for instance, is seen to send world crude prices rising again.

“I don’t think we can reasonably expect people to project beyond one month because we are using the previous month’s average and the volatility of the situation in the Middle East,” Reyes said. “Add to that what’s happening in Nigeria, where [a major] pipeline was attacked and what’s happening in Russia and Ukraine.” –Euan Paulo C. Añonuevo, Reporter, Manila Times