Energy Secretary Jose Rene Almendras pointed to the current trend in the international market and cited the marked increase of petroleum products, particularly diesel. “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.

The DoE said unleaded gasoline imported from the region went up to $94.70 per barrel from $91.30 per barrel the previous week, a difference of over $3. This is equivalent to a P1.51 per liter increase in local pump prices.

The DoE included in its computation the impact of the foreign exchange rate wherein the peso has broken through the P42-to-the dollar level.

Almendras, meanwhile, said oil prices may still go up and urged the public to brace for the reality – and not just a mere possibility – of world oil prices hitting over $100 per barrel.

“We have to face reality that a $100 per barrel will happen. 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,” said the DoE chief.

Asked if international oil prices will continue to climb, Almendras said, “There is a bias to the upside.”

As for domestic prices, the official stopped short of saying that a proportional increase will be implemented by the oil companies.

“I cannot say that it (hike) 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.

Almendras’ statements came at the heels of a hefty P2 per liter hike on diesel prices last Tuesday. The move was slammed by transport groups, particularly those comprised by jeepney drivers since they are the primary users of diesel. The DoE has said that the recent price hike was “within their computed values,” meaning it was justified.

Meanwhile, congressmen on Thursday crossed partylines to ask the DoE to use its oversight powers to rein in the country’s oil players that recently stunned the public with big adjustments in prices of oil products.

Reps. Teodorico Haresco (Ang Kasangga party-list), Elmer Panotes (Lakas-Kampi, Camarines Norte), and Oscar Malapitan (NP, Caloocan City) assailed oil firms operating in the country for claiming losses in the wake of confirmed reports that they have posted huge profits this year.

Haresco said one company had even boasted that it earned an additional 59 percent in profit from January to September, 2010 as compared to last year’s already huge income.

“Which is which? Are they really absorbing losses and that's why they are increasing oil prices or are they raking in profits? These oil companies are becoming too inconsistent. Halatang niloloko na tayo ng mga ito,” Haresco asked.

Since last October, oil companies have been increasing their pump prices at an average of 25-50 centavos per liter. A few days ago, oil companies announced another round of price increase of around P1.50-P2.00 per liter because of the alleged increase of prices in the world market.

Along with the recent oil price hike is the announcement of Petron Corporation that it posted a net income of P5.4 billion in the first nine months of 2010, an increase of 59 percent from P3.4 billion in the same period in 2009, due to higher sales.

“This is unconscionable. These oil firms still have the gall to announce that they are making so much profit while they continue to squeeze our people dry,” Haresco said.

Panotes, a member of the House opposition, urged the House Committee on Energy to place on top of its priority all measures that would stop oil companies from unfairly hiking costs of their products.

“I believe the DoE has enough powers to protect the public against unwarranted oil price hikes. Everybody was caught by surprise by this week’s big increases,” he said.

For his part, Malapitan said bills that would revive the regulated era in the oil industry must now be studied and passed by Congress, if necessary.

Haresco said that he finds it very inconsistent that oil companies are so quick to jack up prices at the slightest hint of a world market price adjustment or slightest depreciation of the Philippine currency but are so sluggish in bringing down their prices if the situation goes the other way around.

The party-list lawmaker proposed that Congress should move to amend the oil deregulation law to strengthen its oversight provisions, possibly with the establishment of muti-sectoral panel that would exercise the government's oversight function and at the same time, set a uniform and acceptable standard for any price adjustment.

“As it is now, there is no clear criteria that is being cited to justice and increase or decrease in oil prices. Factors like inventory, world market price and currency exchange are being cited but in a very inconsistent manner. There should clear and indisputable criteria so that the public are fully assured that they are not being shortchanged by these oil companies,” Haresco said.

Ellson Quismorio, Manila Bulletin