Oil prices likely to soften — DOE

Oil companies may likely reduce anew prices of their pump products this week with the softening of prices in the global crude market, a ranking energy official said.

Energy Undersecretary Peter Abaya has expressed optimism that oil firms will roll back their pump prices despite recent pronouncements by some small oil players that they expect a price increase soon after they implemented a P1 per liter rollback last week.

Abaya said diesel price, however, may remain at its current level.

"Prices will continue on a gradual long term upward trend. But right now, the DOE sees a reprieve from increases. Rollbacks, in fact, are a big possibility based on our numbers. We would like to see decreases that go along with worldwide trends prior to VAT (value added tax)," Abaya said.

From May 1-16, unleaded gasoline stood at an average of $55.34 against the April average of $61.50 per barrel. This led to a price cut in the pump prices of oil companies from P1 to P1.25 per liter.

Oil firms rolled back its gasoline prices by P1 per liter while increased diesel prices by 25 centavos. Petron Corp., the country’s largest oil refiner, implemented a larger rollback on gasoline prices by P1.25 per liter.

Diesel prices also averaged $63.83 per barrel in May, lower than the April average of $68.29 per barrel.

The Independent Philippine Petroleum Companies Association (IPPCA), on the other hand, admitted that while they do not agree to another rollback, they would likely maintain prices at current levels.

IPPCA executive director Rex Tantiongco said small oil players would likely hold prices at current levels for the week as global oil prices continue its downward slide.

But Tantiongco said should world oil prices continue to drop, they would not discount the possibility of more price cuts.