by Paul Anthony Isla/BMirror/12.02.08
HOUSEHOLDS will feel further relief from having to pay for expensive liquefied petroleum gas (LPG) prices, as oil companies announced on Tuesday they cut the price of cooking gas by as much as P4 per kilo, or P44 for an 11-kilo cylinder.
In a stakeholders meeting, oil executives of Petron Corp., Pilipinas Shell Petroleum Corp., and Total (Philippines) Corp. said the LPG-price drop is due to the $153.50 decrease in the international contract price of LPG.
The Department of Energy (DOE) monitoring noeted that LPG has dropped to $336.50 per metric ton in December from $490 per metric ton in November.
Virginia Ruivivar, Petron public affairs manager, said the drop in the international contract price of LPG translates to about P7.50 per kilo. “We expect to reflect on a gradual basis the drop in LPG. We will also try to do it weekly as we can. Since we still have an inventory of high-priced LPG,” she added.
Energy Secretary Angelo Reyes called on oil companies to an industry stakeholders meeting to discuss current world oil prices.
As of December 1, the DOE monitoring said Dubai crude averaged $47 per barrel this month from $50/barrel in November.
It added that Mean of Platts Singapore (MOPS)-based unleaded averaged $45/barrel this month from $48/barrel in November, while MOPS-based diesel averaged $68/barrel from $74/barrel in November.
Most of the time, we follow what the trend of Dubai is. But our cost, since we have an inventory of one-and-a-half to two months, usually have lags,” said Ruivivar.
She added that Petron, for instance, would incur more than P2.3-billion loss for the remainder of the year, which is actually the P4.3-billion inventory loss the company expects to incur due to the rollbacks.
“And effectively the P4.3-billion loss will wipe out the first half income of P2.3 billion. For Petron, we are even actually projecting to end the year with a net loss, as of this time,” Ruivivar said.
Amid all of these consultations, Fernando Martinez, Eastern Petroleum chairman, said there are still claims for more rollbacks and appeals to stagger or hold prices.
“But it seems that there is either a lack in explanation or some just do not want to accept reality. But we can see companies no longer getting good profit margins and that some even incur more losses,” Martinez said. He pointed out that there are lot of people who always seem to be dissatisfied with the price cuts and even showing of financial statements industry stakeholders have done.
“Some must also be reminded that the oil industry is deregulated. And thus, there is also a need to put a stop to threats or challenges for us to open our books,” said Martinez, adding that their financial books are regularly examined by the Bureau of Internal Revenue.
“With this year’s experience, no one in the industry would have ever expected that world oil prices would skyrocket and nosedive as fast as it has,” Toby Nebrida, Chevron’s corporate communications manager, said. He added that losses have been incurred when prices were going up and yet oil companies remained operating to provide quality, safe, reliable and dependable fuel supply.
“In fact, there are still some losses that have to be covered, but we are working to remain in the market,” Martinez said.
Joey Cruz, Flying V spokesman, also warned that Saudi Arabia earlier spoke that international crude prices will hit $75 per barrel. “Saudi Arabia’s pronouncement could result in an increase in local pump prices by early next year amounting to about P40 to P42 per liter,” Cruz said.
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