Oil firms charging P8 more per liter for gasoline - Recto

MANILA, Philippines - Socioeconomic Planning Secretary Ralph Recto has reiterated that oil companies have been charging roughly P8 more per liter than the estimated gasoline price in the market.

Recto, who arrived Thursday night from a joint International Monetary Fund-World Bank meeting in Washington, explained his recent statement that oil prices are higher than what the actual price should be.

He said that based on the Oil Price Monitoring Report of the Department of Energy as of April 16, oil companies were charging as much as P40.85 per liter of premium plus gasoline, P39.71 per liter of premium gasoline and P39.07 per liter of unleaded gasoline.

These, Recto said, are roughly P8 more than the estimated average gasoline price of P32 per liter.

“Assuming that oil companies had purchased their stock of Dubai crude at $50 per barrel or P2,408 per barrel based on an exchange rate of P48.16 to the dollar at that time, then pump prices of domestic gasoline should be about P32.16 per liter,” Recto said.

He added that prices should even be lower if oil companies had purchased Dubai crude in February or March. Oil firms usually have an inventory of at least 30 days.

Dubai crude was at $42.21 per barrel or P2,024 per barrel as of Feb. 20 and $44.51 per barrel or P2,149 per barrel as of March 20.

Quoting historical data to estimate the P32.16 price per liter, Recto noted that when Dubai crude was at P2,176 per barrel in February 2005 (computed at $39.70 per barrel at an exchange rate of P54.81 to $1), domestic gasoline was at P27.37 per liter while at P2,495 per barrel (computed at $45.84 per barrel at an exchange rate of P54.44 to $1) in March 2005, domestic gasoline was at P29.22 per liter.

“Government may not have the tools to lower oil prices under the Oil Deregulation Law and therefore must collect the appropriate taxes from the oil companies so we may make the necessary investments for health, education, social protection to help the poor as well as in renewable energy,” he said.