Diesel prices cut by 25¢

MANILA, PHilippines - Petron Corp., Pilipinas Shell, Seaoil Philippines and Phoenix Petroleum yesterday lowered the price of their diesel products again by 25 centavos per liter.

Petron public affairs manager Virginia Ruivivar said the rollback reflects the drop in diesel prices overseas.

As of Sept. 15, diesel price based on the monitoring of the Department of Energy (DOE) stood at P26.75 to P33.25 per liter.

DOE data showed that the price of diesel at the Mean of Platts Singapore (MOPS), the price gauge of oil importers, dropped to $76 per barrel as of Sept. 21, 2009, $4 lower than $80 per barrel in August 2009.

Exporters believe that the drop was brought about by a slowdown in demand in the United States, the world’s biggest oil consumer, as the summer driving season ends.  

This was aided by speculation that oil producing nations under the Organization of the Petroleum Exporting Countries (OPEC), which produces 40 percent of the world’s oil supply, will keep production steady. 

Oil prices are computed based on the movement of oil prices in the international market, but may also be affected by the movement of foreign exchange and costs of freight and insurance.

On Sept. 14, oil firms slash-ed pump prices by 25 centavos per liter. A week before, they cut the prices of gasoline products by 50 centavos per liter and slashed P1 per liter from diesel and kerosene products.

Multisectoral group Bagong Alyansang Makabayan (Bayan) believes that oil products sold in the country are overpriced by an average of P6.71 per liter.

Former National Economic and Development Authority (NEDA) chief Ralph Recto also claimed that oil companies have overpriced their products by P8 per liter during the height of global oil crisis last year.

The Philippines has a deregulated oil industry, which gives the pricing power to the industry players instead of the government.