Oil falls below $100/barrel; more price rollbacks seen

MANILA, Philippines – A high ranking Department of Energy (DOE) official yesterday said they are expecting another rollback of pump prices in the next few days, and such rollbacks may continue next month.

But the country’s petroleum players still would not say if they will cut their prices anew this weekend, even with the price of international oil dropping to $99 per barrel.

During the weekly Kapihan sa Max’s breakfast forum in Manila, Director Zenaida Monsada of the DOE’s Oil Industry Management Bureau confirmed that fuel prices would continue to go down this month.

“Yes (there will be a rollback). I don’t know how much, but we expect (a rollback),” said Monsada. “This weekend, we are expecting a rollback.”

However, she said she could not tell exactly when and how much it would be, adding that the past increases in the oil price had been significant enough to impact on the demand.

“There was an ease in the demand. There was even a plan to lessen the supply. However, the oil companies decided to maintain the supply. And they would also check on how the trend would go,” she said.

“They (oil companies) are afraid that if the prices go up, demand might even go down and that they would lose profits,” she also said. Monsada said the triggers that could change the trend in oil prices are the weather, the political tensions, and the foreign exchange. Another big factor is the demand, which has recently eased.

She, however, said that the task force on oil deregulation is trying to investigate whether there is a collusion by oil companies on the fixing of prices or just a “matching of prices” to prevent losses.

“It is just a suspicion which the task force has to find out. It is still not an opinion of the task force,” said Monsada. “It is still being investigated.”

No assurances

However, Independent Philippines Petroleum Companies Association (IPPCA) chairman Fernando Martinez, also chairman of Eastern Petroleum Corp., said they are still studying the impact of this substantial decline in global petroleum prices.

Martinez said oil companies are hesitant to give statements on possible rollbacks because they are still awaiting the impact of the decision of the Organization of Petroleum Exporting Countries (OPEC) to cut its production level to 28.8 million barrels per day, a reduction of 520,000 barrels per day from July.

“It’s too early to comment (on possible rollback) on a one day pricing especially with OPEC cuts in volume,” Martinez said.

Petron Corp. spokesperson Virginia Ruivivar shared the same sentiment, saying it is premature to gauge the impact of the drop in global crude prices.

“Directionally, prices seem to be heading down further. We’ll have to see what happens in the rest of September. I can’t comment on rollback yet,” she said.

One-time, big-time

Transport and militant groups are clamoring for a one-time rollback of P3 to P5 per liter as committed by one oil firm a few weeks ago.

Flying V said they would roll back the price of their pump products by P3 to P5 per liter if international oil prices continued to decline.

During the recent oil industry stakeholders’ meeting with Energy Secretary Angelo Reyes, company officials said they were able to give the P3 to P4 rollback on a weekly and staggered basis.

In the same meeting, Martinez said they have already given the rollbacks due to consumers and will only reflect another price reduction probably by the end of September or early October.  – Donnabelle Gatdula