MANILA, Philippines – Motorists may enjoy oil price rollbacks next week if weak trade early this week continues until Friday, according to a top industry official.
“The average for the last three days had been lower than last week. So hopefully next week — if the trend continues — hopefully it would be lower,” Shell Companies in the Philippines chairperson Edgar O. Chua said on the sidelines of the company’s Powering Progress Together (PPT) forum at the Manila Hotel.
Chua said that finished products have been lower by over $1 per barrel but that the impact on next week’s prices would still depend on the week-on-week average, meaning the trading until the end of Friday must be lower so that a rollback could be done for next week.
Current market speculation is that gasoline and diesel products may be rolled back by less than P1 per liter next week.
Chua declined to deny or confirm such market speculation. The rollback and the amount of price cuts will depend on the trades for Thursday and Friday. “It’s market forces,” he said.
Meanwhile, Shell is also appealing a local court decision that could have its Pandacan depot closed.
“We filed an MR (motion for reconsideration) with the Supreme Court because we are coming from the view that Pandacan is safe,” Chua said.
The appeal was filed on January 5, Chua said.
If Shell would lose, Chua said, it would shut down the facility. However, it would not relocate the facility and its current workers at the Pandacan depot would be jobless, Chua said.
Relocating would be a major expense and there are not many sites where Shell can transfer, according to Chua. Shell stood pat on the facility’s safeness. It would be the first in its history to close a facility if it were ordered to do so, Chua said.
The biggest impact on the relocation would be jet fuel, Chua said. The Pandacan depot is near local airports. If Shell relocates farther, it may encounter difficulties in transporting fuel and it may impact airlines’ access to fuel since storage facilities in local airports are only good for one day, according to Chua.
The Supreme Court recently ruled against Manila City Ordinance 8187, which reclassified Pandacan into a heavy industrial zone. It also affirmed its 2009 decision, which upheld the validity of City Ordinance No. 8027, reclassifying the district into a commercial zone.
Meanwhile, another oil major, Petron Corp., said last year it was ready to stop fuel supply operations at its Pandacan Terminal and assured the public that the transfer would “not adversely affect fuel prices and supply.”
Officials of the country’s leading oil refining and marketing firm said it had long been preparing for the transfer. The company apparently made the commitment in 2010 with the Manila government and a group of priests led by then Archbishop Gaudencio Cardinal Rosales to draw up a business plan and establish alternative sites for its Pandacan fuel storage operations.
“We made a commitment to stop our operations and we are ready. We have identified several alternative sites in Luzon to absorb our volumes in Pandacan,” Ang said.