"What we are watching is the foreign exchange situation. Crude oil has practically stabilized at the $30 per barrel level, but the peso has depreciated by over P3 against the dollar since Oct. 2," Energy Undersecretary Cyril del Callar told newsmen during the 13th CEPSI at the Philippine International Convention Center (PICC) yesterday.
The peso was valued at P46.2460 to a dollar on Oct. 2, falling down to P49.1430 on Oct. 24. The average value of the peso for the month of October (as of Oct. 24) is P47.6579 to a dollar.
The September average value of the peso was P45.7882 or a difference of P1.8697. Based on their own estimates, the oil companies need to raise their prices by 21 centavos per liter to recover a peso depreciation of the local currency against the dollar. Thus, a P1.8697 depreciation will translate to a P0.40 per liter price.
"We are not saying that it is a reasonable increase at this point. Let us first see what the prices are at the end of October. Let us not jump the gun," Del Callar pointed out.
Meanwhile, oil executives of Petron Corp., Pilipinas Shell Petroleum Corp., and Caltex Philippines Inc. reacted to a price forecast made by the Consumer and Oil Price Watch (COPW).
COPW head Raul T. Concepcion said oil companies would be increasing oil prices next month by P0.45 to P0.50 per liter based on current crude prices and the peso-dollar rate.
"He did not take into consideration the increase in freight rates in the world market," Antonio G. Pelayo, Petron corporate communications manager told The STAR.
Oil executives said the price increase could be from a low of P0.42 per liter to a high of over P0.50 based purely on crude prices and the forex. – Ted Torres