Council wants fuel dealers to explain oil cost

CEBU, Philippines - The City Council will be inviting representatives of the country’s leading fuel dealers to one of its session to explain why oil prices in Cebu are much higher compared to those in Metro Manila.

The Council agreed to invite the dealers after Councilor Roberto Cabarrubias expressed dismay over the high cost of fuel here and the series of fuel price increases. In a privilege speech, Cabarrubias said prices of gasoline in Cebu now cost at least P44 and up to P46 per liter while diesel fuel costs P35.81 per liter.

Oil dealers earlier explained that the disparity in prices, about P3 higher for every liter here in Cebu, is mostly due to the cost of transporting the fuel to Cebu from Manila. Motorists argued, however, that even in some parts of Mindanao, the price of fuel is still lower than in Cebu.

The date of the session with the fuel dealers is yet to be set.

Motorists also observe that while major fuel dealers sometimes reduce their prices by 25 centavos or P1 for every liter, prices again go up after two days.

Meanwhile, the City Council also asked the members of Congress to review the provisions of the Oil Deregulation Law. The Councilors said that contrary to the belief that the law would reduce the prices of fuel due to stiff competition, the law actually gives fuel dealers the discretion to increase their prices.

In Manila, Senator Francis Escudero urged Congress to revise the oil deregulation law.

“The latest round of fuel-price increases reflects developments in the world market that we should prepare for. It is the poor that are hardest hit by any increase in fuel prices,” Escudero said.

Energy officials said Petron and Shell compute their prices based on the price of Dubai crude while Chevron or Caltex and other small oil players also use the so-called Mean of Platts Singapore as their benchmark.

MOPS is a measure of fuel oil pricing in Singapore that refers to the mean price of oil traded through Singapore as per the data from Platts, a commodity information and trading company. — Rene U. Borromeo/JMO