Oil prices up; businessmen hope it’s temporary
MANILA, Philippines – Large oil firms jacked up prices on Tuesday amid foreign exchange and international product price movements.
Business leaders said entrepreneurs would bear the impact for now and expressed hope that such spikes were just temporary reactions to the volatile situation in Egypt.
Philippine pump prices are vulnerable to international prices and foreign currency movements as most of its fuel is imported.
From 6 a.m. Tuesday, Petron, Pilipinas Shell, and Chevron Philippines raised prices by P1.60/L for gasoline, P1/L for kerosene, and P0.75/L for diesel.
Other companies have yet to announce their respective price adjustments but they usually track those of the so-called Big Three, namely, Petron, Shell, and Chevron.
The three have cornered about two-thirds of the local market for fuel.
“We cannot do anything because of what is happening in Middle East particularly the volatile situation in Egypt. Businesses do not automatically pass on the impact of fuel price hikes to consumers so we tend to absorb it and just hope things will normalize soon,” Philippine Chamber of Commerce and Industry (PCCI) vice-chairperson Donald Dee said in a phone interview. The PCCI is an organization primarily made up of local businesses.
Dee said businesses were on a wait-and-see mode right now and would make adjustments “when the situation calls for it.”
“The fuel price spike may be temporary. We just hope there is no opportunistic reaction, say from the transport sector and utilities here. It’s then that businesses and workers will be more heavily hit,” Philippine Exporters Confederation, Inc. (PHILEXPORT) president Sergio R. Ortiz-Luis Jr. said. PHILEXPORT is an association of firms engaged in international trade.
Economist Cid Terosa of the University of Asia and the Pacific noted that the oil price increase would raise the cost of production of businesses and also affect the spending power of consumers.
“A P1 increase in the price of gasoline will raise producer prices by 4.2 centavos. Workers will suffer a cut in their disposable income since the increase in gasoline price will raise consumer prices,” Terosa said.