Another fuel price increase looms

AFP PHOTO

Local oil companies raised the prices of their petroleum products starting Monday, lifting the “price freeze” they imposed last week in the wake of the powerful monsoon rains that triggered massive flooding in Metro Manila and nearby provinces.

Pilipinas Shell Petroleum Corp., Total Philippines and Chevron Philippines jacked up prices of premium gasoline by P1.80 per liter, regular gasoline by P1.70 a liter, kerosene by P1.60 a liter and diesel by P1.50 per liter effective Monday. Independent player Eastern Petroleum also implemented a similar price hike starting Tuesday.

However, this new round of increases was implemented only within the areas affected by last week’s price freeze, namely, Metro Manila and portions of Laguna, Cavite, Rizal, Zambales, Bulacan, Pampanga and Bataan.

This week’s latest adjustment allowed the oil companies to recover what could have been substantial losses in their operations last week. The price freeze was merely a deferment and not an absorption of the increases in the prices of petroleum products.

Sources said the oil companies were eyeing another round of price hikes later this week to reflect the uptrend in global oil prices last week. It should be noted that the price hike implemented starting Monday reflected the global uptrend of two weeks ago.

Prior to the price freeze, diesel products in these areas were selling at P39.38 to P43.99 a liter, while gasoline products retailed for P49 to P56.57 a liter.

As of Aug. 14, the year-to-date net increase in the price of gasoline in Metro Manila and neighboring provinces stood at P1.43 a liter, while the net decrease in the price of diesel was P1.68 a liter.

As this developed, Bayan Muna party-list Rep. Teodoro Casiño urged the government anew to mitigate the price shock of these increases by reducing the value-added tax (VAT) on oil to six percent from the current 12 percent.

“Even if the industry is deregulated, the government can do something to mitigate the prices by reducing the taxes on oil, specifically the VAT, just like they do in other countries that have lower VAT rates for basic utilities and products,” Casiño said in a statement Monday.

Casiño also called the move of the oil companies “cruel” since “people in Luzon are still recovering from the other week’s massive flood and all the oil companies are thinking of is how to jack up their profits.”