Oil firms mull implementation of P2 weekly hike

MANILA, Philippines – Oil companies are thinking of implementing a P2 per liter price hike every week or P1 per liter twice a week to fast-track recovery of their costs.

“That’s the only way for us to recover. If we increase by P1 to P1.50 per liter on a weekly basis it will take us a long time to recover,” an oil company official said.

The oil firms have already adjusted their prices by a total of P5.50 per liter in the past weeks.

It was estimated that the oil companies will have to recoup some P10 per liter to recover costs incurred for the month of May alone due to the continuing rise in global crude prices.

If petroleum players adopt such a move, it will be a wanton disregard of the Department of Energy (DOE)’s call for them to carry out staggered and small increment oil price adjustments.

Recently, however, the oil firms said they had no choice but to adjust the level of increase due to the worsening global oil price situation.

Flying V chairman Ramon Villavicencio earlier said they need to recover as much as P11 per liter.

Sources said oil companies can no longer bear the costs of the high cost of oil products from the world market and as much as they want to protect the public, especially as the school opening nears, they can no longer do so.

“What if there will no longer be an oil industry? We have always tried to absorb what we can to protect the interest of the public but now it’s different. Some stations have stopped selling 24 hours just to survive,” a source said.

Sources said the only way for the cost recovery to go down is when oil prices globally also go down.

However, the trend in oil prices is still going up, sources said.

Another oil company official said prices might still move once a week at P1.50 per liter since the gasoline adjustments are much lower than the diesel prices.

“It will still be the market that will dictate the prices. If other oil companies, especially the bigger ones, will not adjust that high (P2 per liter), the others will follow,” a source said.

The lower adjustment of gasoline is absorbing the supposed higher adjustment for diesel, officials said.

Last weekend, oil firms raised their prices by P1.50 per liter on all pump products.

A P1 per kilo price hike was implemented on LPG products. – Donnabelle Gatdula