DoE: Fuel prices will eventually go down

MANILA, Philippines — Though they may be skyrocketing now, fuel prices will eventually slide to cheaper levels, the Department of Energy (DoE) believes.

It blamed speculations and concerns that the crisis in Libya would spread to Middle East countries for the fuel price increases.

DoE Undersecretary Jose Layug Jr. likened the current situation to the one back in July, 2008, when world market prices of petroleum hit an alltime high of $147.27 per barrel and domestic prices of gasoline and diesel raced toward P60 per liter.

“What’s happening right now is akin to the situation in 2008 when world crude prices spiked. But we saw that they eventually plunged. The issue in 2008 was supply, now the issue is the speculation and concern that the turmoil would spread (to the Middle East),” Layug said.

“We anticipate that when the conflict ends, especially in Libya, when (Moammar) Khadafy steps down, oil prices will also go down,” the official said.

Four successive price hikes have been implemented since February 8, sending the price of gasoline (unleaded) to P53 a liter, diesel to P43.50 a liter, and kerosene to P52 a liter. The figures represent average prices in Metro Manila, where fuel is apparently cheaper, compared to those in the countryside.

Layug came to the defense of local oil firms, saying their recent price adjustments are reflective of the actual movement in the international market. “International prices have been going up,” he said.

But once international oil prices dip, Layug said oil companies had better reflect it too via price rollbacks during their weekly pump price adjustments. “Once it goes down, they have no other recourse but to follow.”

He said that this notion shows the “fair market price” of oil. –ELLSON A. QUISMORIO, Manila Bulletin