MANILA, Philippines (PNA) — Energy Secretary Jose Rene Almendras Wednesday said the recent oil price increase of P2 per liter for diesel and kerosene and P1.50 per liter for unleaded gasoline is "within the computed values" of the Department of Energy (DoE). "We're not in a position to support or not to support the oil price hike, our mandate is to determine whether they are within reason. Because if they are not within reason, we're supposed to activate the DoE-DoJ Task Force.
"That's what we are supposed to do. So when we see that the increase cannot be justified based on our own computation, then it is incumbent on us to take that action and we will take that action," Almendras said.
Almendras said he was worried that diesel, used by the transport sector went up to over US$ 100 per barrel.
"What worries me is the fact that diesel went up twice that of crude and all the other products. We did inquire from the international market why such a situation occurred. And the explanation is a significant drawdown in diesel inventories and they're pointing to China," he said.
DoE said unleaded gasoline imported from the region went up to US$ 94.70 per barrel from US$ 91.30 per barrel the previous week, which is equivalent to P1.51 per liter increase in local pump prices.
Monitoring also showed that imported diesel increased to US$ 100.10 per barrel last week to US$ 94.90 per barrel from the previous week which was equivalent to P2.09 per liter is local pump prices.
DoE included in its computation the impact of the foreign exchange rate wherein the peso strengthened to P42.73 to the dollar from P43.44 to the dollar.
Almendras, meanwhile, said oil prices may still go up and urged the public to brace for the "reality" of world oil prices hitting over US$ 100 per barrel.
"We have to face reality that a US$ 100 per barrel will happen. All the world is in the direction of preparing for such reality. We have to accept reality that oil is a finite resource, we have to look for alternate energy sources," Almendras said.
"There is a bias to the upside," Almendras said when asked if oil prices will continue to go up in the coming days.
Almendras, however, clarified that domestic oil prices may not go up next week. Oil firms raise prices on a weekly basis.
"I cannot say that it will happen. Because at that price some people will decide to produce more due to the rule of supply and demand will come in. Maybe the other products will go up, maybe diesel will stay where it is, and maybe diesel will come down if volumes are picking up," he said.
Manila Bulletin
