Talks of impending oil price hike premature, says Tiaoqui

Energy Secretary Mario V. Tiaoqui said yesterday that warnings of another round of price increases in petroleum products in the local market are premature.

"Price movements in the world market are still too volatile. It is best therefore to wait until crude oil stabilizes," Tiaoqui said in reaction to reports of a P1-hike this month.

Prices of crude zoomed last Feb. 15 to $25.70 per barrel in the Dubai spot market and to $30.30 in the West Texas Intermediate market.

However, prices have since been moving downwards, temporarily settling at 23.71, Tiaqui said in a statement.

Meanwhile, the nearly five-percent drop in oil consumption in 1999 is one of the highest in the past decade, according to the Petroleum Institute of the Philippines (PIP).

"The two principal reasons for the drop in demand were the significant reduction of petroleum-based products by the National Power Corp. (Napocor) and an economic slowdown," PIP general manager Rey Marquez said.

Napocor, which accounts for more than 20 percent of the country's oil consumption, has been gradually reducing its dependence on fossil fuel.

"It has retired several old diesel-fired power plants and barges while gradually shifting to indigenous power sources such as coal, hydro, geothermal, natural gas, wind and solar. In contrast, there remains an overcapacity situation or an abundance of energy against weak demand.