Malacañang assured the public yesterday that the government is doing everything it can to prevent prices from going up following the latest round of fuel price increases.
The Department of Trade and Industry and the Department of Energy have been "coordinating with the private sector, especially the retailers of basic commodities, the objective of which is to prevent a price spiral of these basic goods," Presidential Spokesman Ignacio Bunye told a radio interview yesterday.
Three oil companies, Pilipinas Shell Petroleum Corp., Caltex Philippines and Seaoil Petroleum Inc., raised their prices by 50 centavos per liter on Sunday.
The increase is a result of rising world market prices of crude oil, they said.
Rising fuel prices is a sensitive political issue because of its immediate effect on the public.
Although the government has no control of prices, it is often held responsible by the public. In the past, government officials have asked businessmen not to raise prices.
Before the industry was deregulated in the mid-1990s, oil companies needed prior government approval before they could raise pump prices.
Fuel prices were also subsidized by the government before the industry deregulation. Energy Secretary Vincent Perez said his department will review the latest increase. "We will evaluate whether the increases in the pump prices of these two oil products were within the justifiable range."
Perez conceded, however, that the latest hike was partly due to the bankruptcy of a large Russian oil company and an ongoing strike in a South Korean oil refinery.
The Philippines imports fuel from these two countries, aside from the Middle East, he said.
The latest fuel price increase put a damper on the cash-strapped Arroyo administration’s efforts to bridge a budget deficit.
Malacañang has decided to suspend a plan to raise its levy on crude oil imports from three to five percent, Perez said. He did not say when the suspension will be lifted.