Oil firms roll back diesel price by P1

Unioil Petroleum Philippines Inc. and Eastern Petroleum Corp. (EPC), two of the most aggressive independent oil firms in the country, roll back diesel prices by P1 per liter today in response to the one percentage point cut in tariff on imported petroleum products.

The rollback came ahead of the Feb.1 schedule for oil companies to slash pump prices following the tariff rate cut from three percent to two percent.

Petron Corp., Pilipinas Shell Petroleum Corp., and Chevron Philippines are likely to roll back their prices on Feb.1.

EPC chairman Fernando Martinez, who is also the chairman of the Independent Philippine Petroleum Companies Association (IPPCA), said they woulld reduce the price of its gasoline products by 50 centavos per liter.

Petron, Shell, Chevron and Seaoil Philippines will reduce the prices only of diesel.

Unioil said the same P1 per liter price cut also applies to its gasoline products.

Unioil spokesman Raymond Zorilla attributed the firm’s decision to slash its prices “to softening of oil prices in the world market, average gain of the peso and tariff reduction.”

For his part, Raul Concepcion, chairman of the Consumer Oil and Price Watch said oil firms have already fully recovered their under-recoveries of P3.50 to P4 per liter for December.

“As a result of the lowering of the crude prices, now in the $85 per barrel range, their under-recoveries of P3 to P4 per liter in December will not only be recovered but they can lower the price by P0.50 per liter. This means we are now at `patas’ or all square,” Concepcion said.

Energy Secretary Angelo Reyes earlier said President Arroyo has already signed the executive order on the tariff cut and that the DOE has already come up with the guidelines for its implementation.

On Jan. 23, Dubai crude slipped to $84.38 per barrel as against the January average of $87.82 per barrel. Gasoline imported from the region was at $97.17 per barrel while diesel was at $104 per barrel.

DOE set the trigger point for the cut from three percent tariff to two percent at $83 per barrel for Dubai and $105 for MOPS-diesel. The figures factor in freight and insurance costs.

The trigger for reducing the tariff from two percent to one percent is at $92 per barrel for Dubai and $110 for MOPS-diesel. For zero tariff, the trigger mechanism was set at $103 per barrel for Dubai and $115 ber barrel for MOPS-diesel. DOE will review the tariff cut implementation on a monthly basis.