Energy chief: Oil firms not increasing prices this month

Oil companies are not likely to increase their pump prices this month due to the stability of the peso against the dollar in recent weeks, Energy Secretary Jose Isidro Camacho said yesterday.

"It is very unlikely (for them to increase their oil prices this month). I don’t expect significant changes (in world crude prices) this month," he said.

He noted that if ever there would be a slight increase in crude oil prices in the international market, it would be offset by the prevailing peso appreciation.

On March 17, the Organization of Petroleum Exporting Countries (OPEC) may cut back crude oil production by about one million barrels per day to achieve a target price level of $24 to $25 a barrel.

If the move pushes through, it would likely affect the local oil market because major oil companies such as Petron Corp., Pilipinas Shell Petroleum Corp., and Caltex Philippines use the Dubai crude oil index as benchmark.

So far, OPEC has not yet reached the high-end of its goal since Dubai crude has been averaging $24 a barrel this year. It was at $22.85 in January, $24.80 in February, and $24.16 as of March 8.

Though he wants to allow the so-called "market forces" to prevail in the industry, Camacho said they would continue to remind the oil players "to take public interest at heart."

Among the Big 3, only Caltex jacked up its price by a minimal five centavos a liter last Feb. 14. The third largest oil company in the country has yet to announce plans for another increase.

Both Petron and Shell have also yet to divulge price adjustments plans for the month. In separate statements, though, company officials said any forthcoming increase "would be very minimal."

"I think we will watch the market. We will try to keep the prices stable. This March ... there shouldn’t be any significant adjustment," Shell chairman Oscar Reyes said.

He said they are looking at the possibility of adopting the same scheme being carried out by Caltex. "What we are trying to do is start looking at the movements (of prices) up and down in reasonable small increment so you don’t build up or accumulate a significant amount," Reyes said.

Petron, for its part, said it is seeing more stable prices this month because of the appreciation of the peso, which Bangko Sentral ng Pilipinas officials expect to settle at 46 to $1 this year.

"We are optimistic that the improved business environment under the Arroyo administration will continue to support a stronger peso, especially now that the Supreme Court has reaffirmed the legitimacy of the new government," the oil firm said.

"The renewed strength of the peso will help in tempering local oil prices despite the increase in international crude oil prices, since the peso exchange rate is a key factor in domestic pricing," Petron said.