The Department of Energy challenged yesterday the country's oil companies to formally declare their alleged financial losses before the Bureau of Internal Revenue (BIR).
"They should be transparent if we are to believe that they cannot roll back the prices of oil products due to alleged losses," Energy Undersecretary Cyril del Callar said.
He was reacting to claims by the oil companies that they cannot roll back prices of local petroleum products this month due to huge losses and under recoveries. The oil firms were saying that imported crude oil must remain at $21 to $22 per barrel for them to consider any price rollback.
Del Callar said that the government and the public would only believe the oil firms' claims of losses only by being transparent with their books of accounts.
He added that officials of the energy department were to meet with representatives of the so-called "Big Three" oil firms and the new industry players to discuss the possible price rollback within the month.
Industry leader Petron Corp. said it lost P500 million in the first two months of the year while Pilipinas Shell Petroleum Corp. reported it lost P200 million during the same period.
President Estrada had said he would ask the local oil companies to roll back their prices this month in the face of reduced world crude oil prices. The Organization of Oil Exporting Countries (OPEC) has decided to increase production by 1.4 million barrels per day to help ease oil prices in the world market.
The energy department said the oil firms could start to roll back prices as crude from Dubai has remained at levels similar to early November last year. The average price of crude as of April 13 was $21.30 per barrel, which is lower than the March average level of $23.
The local oil firms had earlier said it was too early to determine whether they could roll back prices this month.
"Prices are determined on a monthly average basis although prices remain volatile," they said.
Petron and Shell officials said they were still watching the price movements and studying their expenses for the month. However, they cautioned that a further depreciation of the peso against the dollar could dampen any attempt to roll back local oil prices. The peso closed at 41.17 against the dollar yesterday.
The oil firms also said that all purchases made in February and March were at the highest cost since OPEC decided to cut production levels which led to the increase in prices by as much as 100 percent.
The price of Dubai crude rose from $10.02 per barrel in February 1999 to a high of $28.41 last March 7. A reduction in crude cost to $21 to $22 per barrel could lead to a reduction in local pump prices.