Oil firms mull lower LPG prices

Oil companies are studying the possibility of bringing down the price of their liquefied petroleum gas (LPG) products, an industry official said.

Pilipinas Shell Petroleum Corp. country chairman Edgar Chua, briefing reporters at the sidelines of the signing of a memorandum of agreement among the Department of Energy (DOE), SGV & Co. and the University of the Asia and the Pacific for the conduct of an enhanced oil pricing study for the country, said “for LPG, the price is going down so the domestic price of LPG can be rolled back.”

On local pump prices, Chua said based on current global prices, domestic pump prices would remain stable for the rest of the year.

“More or less there will no be movement in oil prices, everything depends on market forces. So if market forces do not dictate the need then prices will be kept at its current levels,” he said.

David Balangue, chairman and managing director of SGV, said the proposed study covered by the MOA will kick off early next year.

 “We’re supposed to meet on Jan. 15 to fix the time frame, periods and what exactly will they need for us, what is the process,” he said. 

Balangue pointed out that the study will be done for free. “We won’t charge them.”

He said the study will basically deal on checking the veracity of the data of the oil firms. “We will just check the veracity. When they submit information/figures, we want to make sure what they submit is correct. And the way to do that is by looking at the underlying documents, reports and other sources – compilation of price and volume of importation.”

“We will not simply rely on the submissions of the oil companies, but we will rely more on third party information –from Singapore (MOPS).  The study will focus on the oil price and determine its reasonableness.”

“We’re doing this phase by phase. After doing it once we’ll look back and determine how to improve the process and what information we’ll need to make sure that the results are more dependable and reliable. It’s a process that we would have to continually revisit and improve. And hopefully it will be institutionalized – that’s normally what we do. Once we know exactly how it works, we will submit a recommendation to make it more permanent. This is definitely not a one-shot deal – this is going to be a continuing concern of the transport and public sector. I, as an individual person, am also concerned as to the reasonableness of oil and LPG prices,” he said.

But initially, he said the company would suggest that they focus at the years or period where there were several fluctuations of oil and LPG prices and relate to the pricing that they’ve done. “We will determine which will be the best sample,” Balangue said.