New oil players poised to hike prices; Estrada requests moderation

New players in the local oil industry said yesterday they are poised to raise prices of gasoline and other petroleum products by an average of P1 a liter starting next week.

Fernando Martinez, president of the New Petroleum Players Association of the Philippines, said the planned hike was triggered by the peso's weak performance against the US dollar.

The new players said they are still selling their products based on a P41.40 exchange rate even though they purchased crude oil at an exchange rate of almost P43 to the dollar.

"We can no longer take the losses," said Martinez, who is also chairman and chief executive officer of Eastern Petroleum Corp.

Martinez said he expects Malacañang to intervene anew.

When this happens, "we may concede but this will only force us to implement a series of price increases in the same month," he said.

Already, President Estrada has instructed Energy Secretary Mario Tiaoqui to request local oil executives to be moderate in their planned price hike.

"If the oil companies cooperate, the effect of higher world crude oil prices on the inflation rate would be negligible," said Economic Planning Secretary Felipe Medalla.

The price of crude oil in the world market rose by nearly $3 a barrel, while the peso weakened against the US dollar.

Following the standard rule of increasing local pump prices by 30 centavos for every dollar increase in crude prices, adjustments would amount to at least 90 centavos a liter.

Local prices must also be adjusted by as much as 15 centavos per liter for every peso depreciation of the peso against the US dollar.

Tiaoqui said he is scheduled to talk with local oil executives on Monday to discuss the planned price hike.

"We will listen to their planned increase and we will ask them to temper them. However, we cannot order them to postpone or decrease the planned hike as the oil industry is deregulated," he said.

Earlier, executives of Pilipinas Shell Petroleum Corp., Petron Corp. and Caltex Philippines Inc. told President Estrada that they plan to raise prices of fuel and other petroleum products as a result of the peso's lackluster performance against the US dollar.

The executives did not say when and by how much they will raise their prices, but they told Mr. Estrada that the price of crude oil in the world market went up by as much as $3 a barrel.

"The Arabs really hold us by the neck," Mr. Estrada told jeepney operators and drivers during the launching of his latest pro-poor project dubbed as Pampamilyang Sagip sa Kabuhayan (PASAKAY).

"We cannot do anything if they want to raise prices," he added.

Mr. Estrada then expressed concern that this looming oil price increase will be blamed anew on him.