Climbing pump prices inflationary–NEDA

THE National Economic and Development Authority (NEDA) on Wednesday warned that “expensive” oil prices would push consumer prices higher, which would further burden the country that is already on the brink of a recession.

Socioeconomic Planning Secretary Ralph Recto said escalating oil prices have an inflationary effect of 0.066 percent, adding that consumers have “very little fiscal space and are very sensitive to prices.”

Recto said that the reduced fuel prices translate to lower transport costs and lower food prices, which benefits “all especially the poor as their purchasing power increases.”

From January to May, the National Statistics Office reported that inflation rate was decelerated to 5.7 percent from 8.3 percent in the same period last year.

The Development Budget and Coordinating Committee pegged inflation this year to be between 2.5 percent and 4.5 percent.

The NEDA chief earlier said that based on NEDA’s computation, the local pump prices were overpriced by P8.

As of last week, the prevailing price in Metro Manila for diesel ranged from P40.43 to P45.85; diesel, P27.40 to P34.03; kerosene, P37 to P41.25; auto LPG, P18.23 to P20.08 and 11-kilogram LPG cylinder, P436 to P530.50.

On Tuesday, Pilipinas Shell Petroleum Corp., Phoenix Petroleum Philippines Inc., Petron Corp., Unioil Petroleum Philippines Inc. and Chevron Philippines Inc. (formerly Caltex) announced an increase of P0.50 a liter for gasoline and diesel.

Oil refiners Shell and Petron also increased their kerosene prices by P1 a liter.

Recto said that NEDA’s computations serve as a benchmark whether or not oil prices are expensive.

The NEDA chief added that based on the initial review of oil firm’s audited financial statements, the agency still needs additional data from the oil companies pertaining to sales, cost build-up, production cost, paid taxes, supply, demand, and market share.

The agency’s review on oil firms’ financial statement aims to come up with a fair and transparent pricing system.

Recto noted that his agency should “not be distracted from keeping prices stable, including that of oil, to help consumers anticipate and handle price changes.”

“Despite grumblings of Energy Secretary Angelo Reyes, we should be forward-looking and stay focused on addressing oil price volatility. In fact, we are happy this is now being talked about since our concern is that in the current framework of a deregulated downstream oil industry, somebody must take the side of the consumers. And we are the one taking their side,” he said.

“It is not our intention to pick a fight or quarrel with anyone especially during these challenging times. We certainly value a united Cabinet as well as cooperation among its members,” the NEDA chief added. –Darwin G. Amojelar, Senior Reporter, Manila Times