Philippines: Rising oil prices cause concern

This is from the Daily Tribune.
The Tribune is always rabidly anti-Arroyo so you can translate "panics" by "shows concern"! The Philippines is very dependent on foreign oil. The dominant oil companies are often challenged when they raise fuel prices and damaging transport strikes called. In much of the Philippines privately owned jeepneys are the backbone of public transport and the operators are often operating on razor thin profit margins. As a result even a small increase in fuel prices threatens their viability since fares are usually (perhaps always I don't know) regulated. Authorities are reluctant to raise fares for obvious political reasons.


GMA panics over latest world oil price hike, calls for energy summit



01/05/2008

President Arroyo will call for an energy summit to draw mitigating measures to be undertaken by the government following the record-high increase in the prices of oil in the world market which has reached $100 to a barrel yesterday.

Press Secretary Ignacio Bunye and Presidential Management Staff chief Secretary Cerge Remonde said Mrs. Arroyo has instructed Department of Energy (DoE) Secretary Angelo Reyes to organize an energy summit at the soonest possible time with all energy stakeholders “to enhance policies and programs, attract investments in technology and launch development projects that would impact favorably on




energy supplies and prices, while keeping significantly arrested climate change.”

The Chief Executive also ordered the DoE to coordinate with the Department of Trade and Industry and Department of Finance to come up with recommendations on the possible reduction of tariff on oil.

Deputy presidential spokesman Lorelei Fajardo, for her part, stressed there is no cause for alarm as they do not expect a domestic oil price hike to stem from the latest development in the world market, at least anytime soon.

She, however, pointed out in the event oil price adjustments are implemented, the government would make sure it would be reasonable and that safety nets would be put in place.

“The government has taken appropriate positive steps to maintain the oil price at its current level. Safety nets are being put in place to cushion the impact of a sudden (oil price) increase. Through the DoE, reasonable oil price adjustments might be implemented after all hikes in oil prices are fairly evaluated. The DoE is not expecting a domestic oil price hike at least over the weekend. This should not cause any alarm and we appeal to our consuming public to avoid speculation,” Fajardo said in a text message.

Malacañang also claimed the country gets its oil supply from Dubai and that the current $100 oil price is the benchmark being used by the United States.

“The DoE has continuous coordination with the oil companies and is expecting the audit reports within the month to make sure further (oil price) increase would be reasonable and gradual. The discounted rates for public utility vehicles (PUVs) in gas stations still remain,” Fajardo said.

Remonde said the government will also focus on the use of alternative fuels if the trend in world oil prices continues.

Meanwhile, the transport group Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide (Piston) warned the “multinational oil cartel” operating in the country—Pilipinas Shell, Chevron Philippines and Petron Corp. against raising local oil prices anew in connection with the latest price hike in the world market.

Piston secretary general George San Mateo insisted the reason oil prices reached $100 in the New York Mercantile Index was pure speculation and had nothing to do with the actual and physical production of oil and the present supply and demand.

He warned that Piston would immediately launch protest actions if the oil companies instigate another weekly round of oil price hikes.

Piston led successful nationally-coordinated protest actions in Nov. 26, 2007 and a nationwide transport strike last Dec. 13, 2007.

San Mateo also reminded the oil companies that they cannot use the latest world oil price hike to justify another local price increase, saying the Philippines does not use the New York Mercantile Index Price as basis for adjusting local prices.

“The Dubai Crude and Means of Platts Singapore (MOPS) spot market price and the local dollar-peso exchange rates are the only basis for adjusting local oil prices. In fact, the big oil cartel should implement a significant rollback in all its gasoline stations nationwide because the prices of crude oil in the Dubai spot market and the prices of finished petroleum products, specially diesel, in the MOPS have remained stable. It’s still $83 per barrel in the Dubai Crude and diesel is still at $105 per barrel in the MOPS while the peso has risen to P40 against the dollar,” he explained.

The group last week denounced Shell, Chevron and Petron for implementing an oil price rollback only in selected gasoline stations even as small players Eastern Petroleum and Uni-Oil made a P0.50 rollback in their gasoline, diesel and kerosene prices.

“The above-mentioned situation only proves that the big oil cartel is super greedy and profit-hungry and will not hesitate to grab every opportunity to enlarge their super profits at our people’s expense. These things are happening and will continue to happen for as long as the Oil Deregulation Law exists and the Arroyo government continues to connive with the big oil cartel,” he stressed.

But San Mateo expressed optimism that PUV drivers and the Filipinos will be able to fight back any oil price increase that might come this year, saying they will take inspiration from the success of the nationwide strike and protest actions that Piston and the multisectoral People’s Unity Against Oil Price Increases led last year.

“The above-mentioned victories are not yet the ultimate victories that we want to achieve. But they prove that with the unified collective action of the drivers and the consumers alike, we the people are capable of making our voices heard and can achieve some tangible victory as well,” he pointed out.

San Mateo said Piston will hold its national council leaders meeting within this month or early next month to finalize its new set of plans if ever continuous rounds of oil price hikes continue. Sherwin C. Olaes and Charlie V. Manalo