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Friday, March 29, 2024

Cusi asks Petron to offer cheaper diesel to boost price competition

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Energy Secretary Alfonso Cusi welcomed the offer of Petron Corp. to offer diesel products at a cheaper cost to state-run PNOC Exploration Corp. but said consumers will benefit more if the low-priced fuel is sold directly to the public.

“That is great news.  This is a positive development that we can still bring down [pump] prices. What we are saying [is] if that is the pump price that is being offered, maybe we can ask Petron [president] Ramon Ang to offer it directly to the public,” Cusi said during a breakfast forum organized by Samahang Plaridel at Manila Hotel Monday.

Petron president Ramon Ang made the offer after the board of PNOC-EC approved the plan to import 50,000 metric tons of diesel that would be P5-per-liter cheaper than the current pump prices.

Ang said instead of buying diesel from other countries, PNOC-EC should secure it from Petron which has a refinery in Bataan to save on logistics cost.  Petron owns the country’s biggest oil refinery with a capacity of 180,000 barrels per day.

Ang said the government would not have to pay for excise and value-added taxes and freight costs if it would buy its fuel from Petron, thus saving as much as P12 to P17 per liter.

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“We are hoping that Petron will offer lower price compared to its competitors. That is a great development.  We welcome that,” Cusi said.

“Why not just offer it directly to the public through offering lower pump price versus the others to truly create competition,” Cusi said.

Ang wanted PNOC EC to buy from Petron instead of proceeding with its oil importation.

“Definitely, our price is very competitive to be exported to Singapore. Freight alone, they will have huge savings. Why will they import there? That’s dollar outflow,” Ang said, referring to PNOC-EC’s plan.

“If they import, there is a huge risk of peso devaluation. There is a huge fluctuation if the price of oil and freight cost is already P5 if you import,” he said.

PNOC-EC president Pedro Aquino said Ang’s offer was worth considering.

Ang said PNOC EC would not need to pay for excise tax and value-added tax if they would buy from Petron. “They can buy from us and sell it and get BIR certification, so there will be no VAT and excise tax,” he said.

“Excise tax and VAT, that is already P11 to P12 [in savings], plus freight [of] about P5,” Ang said.

Ang said Petron’s fuels are Euro 5 and Euro 6-compliant and cleaner than the Euro 4 products that PNOC-EC was planning to import.

The board of PNOC-EC earlier approved the import plan and expects the first shipment to arrive this month.

Aquino earlier said the imports would be around P5 cheaper per liter than the prevailing pump prices.

He said the company had not chosen a supplier yet because negotiations for the final price was still ongoing.

“It depends on the price we will get, but if we are able to get a price lower than the MOPS of Singapore, initially that is P5 less than the pump price,” Aquino said.

Aquino said the initial plan was to import 50,000 metric tons of diesel that would cost around P2 billion.

“I think it will be approved [by board] because what we aim to achieve is to bring down the cost of petroleum,” he said.

Aquino said the company would tap “aggregators” to distribute the lower-priced diesel to consumers.

“The program runs like this. The gasoline station owners or dealers, they will have aggregators because we really lack the machinery to distribute it. The aggregator will stand as distributor to dealer members in their specific region,” he said.

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