Gas prices up by P1 per liter

Published by rudy Date posted on January 28, 2009

Petron Corp., Pilipinas Shell Petroleum Corp., Chevron (formerly Caltex) and Total will increase today the pump price of gasoline by P1 per liter.

The firms, however, will also reduce the price of diesel by 75 centavos per liter and kerosene by P1 per liter.

PTT Philippines Inc. will also increase gasoline pump price by 50 centavos per liter, while it will cut the price of diesel by P1 per liter.

Seaoil Philippines Inc. reduced yesterday the price of its diesel and kerosene by P1 per liter.

Based on Department of Energy (DOE) price monitoring, as of Jan. 24, the price of diesel stood at P25 to P31 per liter while gasoline is selling at P29.35 to P33.82 per liter.

Dubai crude, the benchmark used by oil refiners, averaged $44 per barrel as of Jan. 26 compared to December’s price of $41.

Importers’ price gauge Mean of Platts Singapore (MOPS), on the other hand, stood at $61 per barrel, about the same level as end-December 2008.

As this developed, the Bagong Alyansang Makabayan (Bayan) has called for the repeal of the oil deregulation law in the light of rising prices of liquefied petroleum gas (LPG) amid an alleged supply shortage.

Bayan said consumers should not bear the burden of rising prices, especially if there is reason to believe that the alleged supply shortage was avoidable to begin with.

The militant group said that the “price cap” being imposed by the Department of Energy (DOE) on an 11-kg LPG tank is meaningless, given that fact that LPG prices have long been deregulated.

Big oil firms retailing LPG can merely invoke market forces and supply and demand as basis for price increases.

Even the price monitoring on the DOE website will show that several LPG brands are in fact being retailed at more than P500.

As of Jan. 21, Caltex LPG retails by as high as P520 in Metro Manila; Catgas, P525; and Philgas, P520, according to the DOE website.

Bayan believes that deregulation has not brought down prices and has, in fact, strengthened the cartelized nature of the LPG market.

Bayan said that despite the entry of the so-called “new players” under the deregulation regime, almost 92 percent of the domestic LPG market is still monopolized by only four companies: Petron accounts for 37.8 percent of the market, followed by Liquigaz (24.6 percent), Shell (20.5 percent), and Total (8.7 percent).

Petron acquired the LPG retail business of Chevron in June 2007 and now retails the Caltex LPG brand. Total, on the other hand, has a 15 percent stake in Shell Gas Eastern Inc. through a joint venture with Shell. Liquigaz is a local subsidiary of SHV Gas, the world’s largest retailer of LPG based in The Netherlands.

“Any issue about shortage should be adequately explained by these four companies. Any probe on lack of LPG must start with an investigation of these firms, which overwhelmingly control depots, terminals, and refilling stations and hold the widest network of dealers in the country,” Bayan said.

The country’s four biggest LPG retailers (Petron, Liquigaz, Shell, and Total) have already implemented an identical P2 per kg hike in LPG prices.

“They claim that the international contract price of LPG has jumped from $336.5 per metric ton in December 2008 to $380 this month,” Bayan said.

Bayan, however, argued that the Dubai benchmark as of December 2008 taken with the December average forex rates would show that retail prices of LPG for January should have gone down by P60.81 per 11-kg tank.–Donnabelle Gatdula, Philippine Star

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