Looking at the monthly averages of Dubai crude, foreign exchange (forex) and their combined impact on domestic pump prices, the multisectoral umbrella Bayan today said that petroleum prices should be lowered further than what the oil firms have done so far.
Bayan spokesman Arnold Padilla said that the group’s study justifies a rollback of P60.81 in the price of an 11-kg tank liquefied petroleum gas (LPG).
Padilla also said that diesel prices should be cut by P9.56 per liter; kerosene by P12.60; and unleaded gasoline by P3.57.
Shell, one of the Big Three members of the purported oil cartel, even recently increased the retail price of its 11-kg LPG tank by P22.
“The impact on domestic prices of Dubai crude and forex adjustments varies depending on the levels of these variables. In December 2008, for instance, a $1 per barrel adjustment in the price of Dubai crude translated to a 34 centavo per liter adjustment in domestic pump prices. Meanwhile, a P1 adjustment in the forex rate translated to a 29 centavo per liter adjustment in domestic pump prices,” said Padilla.
Padilla explained that “the December average of Dubai crude, the country’s benchmark in pricing oil products, further declined to $40.53 per barrel, down 18.7% from its November average and 69.1% lower from its peak level in July. Overall, the price of Dubai crude fell by 5.1% a month last year, with steep cuts in the second half offsetting the huge increases posted in the first half of 2008”.
On the other hand, the Bayan leader said that the peso weakened against the US dollar last year. “It started the year at P40.90 in January, showed slight appreciation in February before depreciating progressively for the rest of 2008. By December, the forex rate was pegged at a monthly average of P47.98 per US dollar.”
Bayan said that oil companies continue to overprice their products, no thanks to the policy of deregulation.
“Oil companies will continue to exploit the Oil Deregulation Law to impose exorbitant pump prices at the people’s expense. Such abuse can be checked through effective regulation of the downstream oil industry,” said Padilla.
Bayan’s allies in Congress have filed bills on the buy-back of Petron, the setting up of a national oil procurement mechanism and the nationalization of the petroleum industry.