Pump price of gas seen to climb to P70 per liter

Domestic oil prices will to soar to the P70 per liter level soon as global crude skyrockets to record peaks, a top economist said.

Victor A. Abola, head of First Metro Investment Corp. (FMIC)-University of Asia & the Pacific (UA&P) Capital Markets Research, said government should focus on crafting a well-defined plan to be significantly more energy-efficient and save on power and fuel costs.

“If oil does break $150 per barrel and reaches $165 per barrel enough to average $150 per barrel in any given month, then projections of the International Energy Agency may fall short by 10 percent. If this happens, then high-end gasoline would reach P71/liter while diesel could well hit P60 per liter,” he said.

Abola said government should start investing in alternative energy sources and energy efficiency.

“Four years ago, we started ringing the alarm bell for people to invest in alternative energy sources and energy efficiency. The technology existed even at that time. Since then more improvements have taken place in solar, wind, geothermal energy, and more should come with the additional investments and research even when oil was just above $50/barrel,” he said.

He said by investing in energy-saving devices, firms can reduce energy costs by 20-30 percent depending on the type of equipment being used and energy saving systems applied.

“For example, large firms in rice-producing areas can generate their own electricity using rice hulls (waste from milled palay). Operating costs are estimated to be only 15 percent of power using bunker fuel, while the estimated investment cost is only P38 million for one megawatt (MW),” he said.

He also suggested that households invest in converting at least one car to LPG, which saves about a third of the gas bill.

Abola also suggested the conversion to compact fluorescent light (CFL) bulbs which consume only some 20-23 percent than that of ordinary incandescent life and a life span eight times longer.

Apart from car pooling to reduce gas expenses, he said middle to high income families should try to take more public transportation like the LRT-MRT which is clean, reliable and safe, even though the operators of these systems should increase the frequency of the trains and address the long queues that, at times, extend to outside the stations.

“The government should also provide funding so that the number of carriages per train trip may be increased. Companies, on the other hand, should consider company-chartered shuttle buses or some cost-effective transport or food subsidies, and convert some company cars/vans to LPG,” Abola said.