Drilon: Shell sees lower oil prices

Pilipinas Shell Petroleum Corp. is expecting the price of crude oil to go down in the next few months, Sen. Franklin Drilon said yesterday.

Drilon, who met with Shell officials recently, said that if oil prices in the international market go down to about $21 per barrel, this would result in the lowering of local pump prices.

The prevailing average cost of crude oil is $22 to $23 a barrel, he added.

However, he said local oil companies plan to keep pump prices at current levels to enable them to recover past losses when crude prices reached $24 a barrel.

"Historically, the prices of crude oil in the world market go down after the winter season in the United States and Europe because of declining demand," Drilon said in the weekly radio program he shares with Rep. Ernesto Herrera on dzRH.

Herrera on the other hand, said any oil price adjustment would have a negative effect on people's income because the price of oil determines the cost of food.

In the same radio program, Raul Concepcion, chairman of the Consumers' Oil Price Watch, said he expects a slight increase in pump prices soon since crude prices are about $2 higher today. Earlier reports said the increase is expected by the end of the month or early in February.

The Philippines has one of the lowest pump prices in the region, except for Indonesia, an oil-producing country, he added.

Drilon and Herrera appealed to Shell, Petron, and Caltex to freeze current prices for as long as they could to avoid any price movement between now and the end of winter.