Power rates, fuel prices all on the rise

MANILA, Philippines - Prices of electricity, oil and liquefied petroleum gas (LPG) are all on the rise, but Energy Secretary Carlos Jericho Petilla maintained that the government’s hands are tied.

“It’s way beyond our control. It’s due to the movement in the world market. It just happened. It was not planned,” Petilla said in a briefing yesterday after industry players led by Petron Corp., the biggest oil firm, announced an increase in its LPG prices.

Petron increased LPG prices by P14.30 per kilogram (VAT inclusive) except in the provinces of Aklan, Bohol, Leyte and Samar, which were affected by recent calamities. “The prices in these areas will increase in two tranches: P8/kilogram on Dec. 2 and the balance of P6.30 per kilogram (VAT inclusive) on Dec.15.”

For autoLPG, Petron raised prices by P7.99 per liter (VAT inclusive).

Petron said the price increase reflects movements in the international LPG contract prices for December.

Petilla said the government would look into reports of shortage in LPG supply.

“I would like to investigate this on both sides: artificial shortage and artificial demand,” he said.

But he said that while LPG prices have increased, it’s not the highest price increase the country has ever had.

“The highest price was experienced in March 2012. Retail prices are still lower than March 2012,” he noted.

At the time, LPG prices went up to P1,000 for an 11-kilogram tank.

Oil price, power rates up

Oil prices, meanwhile, are expected to go up again this week as local petroleum players track movements in the global crude market.

The price of diesel is expected to increase by P1.10 per liter while gasoline prices are projected to climb by 30 to 50 centavos per liter, marking the first adjustment for the month of December and the third price hike in three weeks.

Electricity rates are also expected to increase this month and in January 2014 because of the Malampaya shutdown.

“Malampaya is currently on shutdown because it needs maintenance,” Petilla explained.

Manila Electric Co. (Meralco) is expected to announce today the power rates for the month of December.

Electricity rates for the month of November went up by P1.24 per kilowatt-hour (kwh) on the back of maintenance shutdown of the Malampaya Deep Water Gas-to-Power project, which supplies natural gas to three power plants in Luzon. The maintenance shutdown started from Nov. 11 and will run up to Dec. 10.

Petilla said that during the shutdown, Malampaya plants would run on diesel, which is the “most expensive.”

Power rates in ravaged areas might increase

Electricity rates in areas affected by Super Typhoon Yolanda may also eventually increase to recover the costs of repairs but this will be subject to the approval of the Energy Regulatory Commission (ERC).

To date, the cost of repairs and restoration of transmission and distribution lines is estimated at P6.5 billion, which may be covered by funds from the national government or from the multibillion-peso Malampaya funds, Jericho Petilla said.

“Anything not covered by the national government, there is no choice but to charge it to consumers but this will have to be applied with the ERC,” Petilla told reporters.

“It is only fair that the ERC approves this because all of them are taking risks,” he added.

But the energy chief stressed that nothing is final yet and that the government is still eyeing to tap the Malampaya funds to finance the cost of the restoration. There is also no legal opinion yet on whether the national government can use the Malampaya funds for restoration efforts.

“We’re still waiting for that. There’s no legal opinion yet,” Petilla said, adding that what is important is to restore electricity by Dec. 24, the target that he set.

To date, Tacloban and some parts of Leyte and Samar are still without electricity after the transmission lines and power facilities in these areas were damaged by Typhoon Yolanda.

Petilla said that more than 50 percent of damaged transmission lines have already been restored but electric cooperatives have restored less than 50 percent of the damaged distribution lines.

Petilla earlier said he would resign if there was still no electricity in affected areas.

“There’s a good chance that I still have a job on December 24. I’m saying a good chance but it’s not 100 percent. We have a deadline but we don’t have to kill ourselves over our deadline. It can be earlier but it can also be later,” Petilla said when asked on the status of the power restoration efforts.

The National Grid Corp. of the Philippines (NGCP), the country’s transmission highway operator, said that it has completed the repair of one of the main transmission backbones of Panay Island, bringing back power to the western part of Visayas.

NGCP announced the complete restoration of its Dingle-Panit-an 138-kilovolt (kV) transmission line located at the northeast part of Panay Island.

“The line suffered five toppled towers among more than 400 structures damaged by Typhoon Yolanda in Panay Island alone,” NGCP said.