MANILA, Philippines — Fuel price adjustments this week cover both hikes and rollbacks, with gasoline set for the steepest increase of nearly P2 per liter, according to the Department of Energy.
DOE Secretary Sharon Garin said pump prices of gasoline may rise by as much as P1.90 per liter, diesel by P0.84 and kerosene by P1.22 starting today.
But some fuel stations may also implement maximum price rollbacks of P0.10 per liter for gasoline, P1.16 for diesel and P0.78 for kerosene.
People are questioning the range in fuel price adjustments.
“With oil markets calming, we have placed a price range so that companies can earn near what they pay as actual expenses,” Garin said yesterday.
“Each company can choose within a range what it wants to mark up or mark down… Some of them are running at a loss, while others are earning, but this is just an average. Hopefully, while we’re not returning to the previous (prices), this will be the compromise that we have seen,” she added.
Despite the DOE’s prescribed rollbacks this week, several fuel stations have opted to only implement price hikes.
Shell will hike gasoline prices by P1.65 per liter, diesel by P0.84 per liter and kerosene by P1.22 per liter – all within the upper band of the prescribed range.
Amid stabilizing prices driven by easing geopolitical tensions, the DOE continues to implement a price range system, which is more flexible compared with previously mandated fixed adjustments.
But motorists have raised concerns that the more flexible pricing approach gives oil companies greater room to set prices.
Garin defended the policy, saying current pricing rules take into account oil firms’ financial and operational conditions.
The price range, she said, reflects the actual expenses companies incur in procuring petroleum products, with some earning profits while others suffer losses.
Before the US-Israel war with Iran, the DOE mainly served as a monitoring agency for fuel prices, in line with the Oil Deregulation Law of 1998.
This changed when a national energy emergency was declared, triggering the DOE’s authority to “temporarily take over or direct the operations” of oil industry players.
Petroleum reserve
Meanwhile, the planned strategic petroleum reserve of the government will take about a decade to construct, with the project’s first phase to be operational by 2028, the DOE said.
The reserves intend to add 30 days of petroleum products to domestic inventory, complementing the maximum 60-day storage capacity currently held by private companies.
DOE Undersecretary Alessandro Sales clarified on Monday that this project needs further studies and an enabling law from Congress.
Maharlika Investment Corp. (MIC), the sole administrator of the country’s sovereign wealth fund eyeing to help bankroll the project, stressed that this initiative is a medium-term response by the government, led by a consortium comprising the public and private sectors.
Last week, MIC president and chief executive officer Rafael Jose Consing Jr. explained that the firm will not manage the commodity once the tankers are built. — EJ Macababbad