This was learned from Energy Secretary Vincent Perez who pointed out that the current high prices of crude oil in the world market are causing grave concern among oil importing countries.
Perez said 22- member countries of the Asia Cooperation Dialogue (ACD) are meeting this week in Manila to discuss strategies on how to resolve the oil price crisis and come up with alternatives to traditional fuel sources.
He said the meeting is an opportune time to discuss ways to ensure steady and efficient energy supply to sustain Asia’s accelerating economic growth.
"This meeting of oil importing and oil producing countries should formulate goals to ensure reliable energy supply that is environmentally safe secure and competitively priced. For instance, we must diversify our energy sources such as natural gas and other indigenous renewable sources and develop technologies and infrastructure so that these other fossil fuels can be used efficiently and safely," he said.
Perez stressed that these steps are necessary to prevent oil producers from unduly taking advantage of developments in the market and keeping oil prices high.
International oil prices reached 13-year highs last week with Dubai crude breaching $40 per barrel due to the continued geo-political crisis in Iraq, the increasing demand of the rebounding economies across the globe, particularly China, as well as the perceived low reserves in the United States.
US crude prices have remained above $37 for the past three weeks. US wholesale gasoline prices also reached a 20-year high due to fears and speculation of a possible shortage during the period of peak summer demand.
In the Philippines, oil companies last week raised prices of diesel, gasoline by P1 per liter and P1 per kilogram of kerosene.
The hike in local oil prices is certain to spur another wave of protests from various sectors, especially consumers who fear this will trigger a rise in prices of basic commodities and subsequently, create an inflationary effect on other goods and services. Power utilities and other fuel-dependent industries will have to adjust production costs to reflect the added cost of fuel.
Local economists said the Philippines’ economic growth could be cut by as much as 1.6 percentage points if oil prices continue their ascent. A sustained increase they said, presents a major risk to this year’s inflationary outloook as this will prompt clamors for higher wages, push up inflation and unemployment, and in a grim scenario, even thwart all economic recovery efforts by the government.
Oil giants Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex responded to upward oil prices by importing more finished products to scrimp on operating costs. However, they are not totally isolated from the oil price crisis and have to eventually hike local pump prices.
The Philippines is playing host to the 2nd ACD Energy Working Group (ACD-EWG) meeting from May 19-20 at the Dusit Hotel in Makati City.
The ACD was created during the 34th ASEAN Foreign Ministers‚ Meeting in Hanoi in July 2001 upon the initiative of the Thai government with the objectives of exploring possibilities of creating cooperation within the energy sector in the field of research, development and technology transfer; promoting foreign direct investment schemes and project financing among the ACD countries and ensuring energy supply security in meeting energy demand requirements.
Its member countries are Bahrain, Bangladesh, Brunei, China, Cambodia, India, Indonesia, Japan, Kazakstan, Korea, Kuwait, Lao PDR, Malaysia, Myanmar, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand and Vietnam.
The ACD-EWG Joint Declaration on Energy Supply Security will be presented to the third ACD Ministerial meeting in China on June 2004.