LPG price cut by P70 over oil supply glut

Oil companies rolled back the price of liquefied petroleum gas or cooking gas by as much as P70 per 11-kilo tank to reflect the lower contract price of LPG in the world market for December.

Petron Corp., which sell the Gasul brand, announced a rollback of P6.40 per kilo while Isla LPG, which markets the Solane brand, cut LPG prices by P6.36 per kilo. Petron said it will also cut the price of auto LPG by P3.50 per liter.

“Petron will rollback Gasul and Fiesta Gas prices (VAT inclusive) by P6.40/kg effective later 12:01 a.m., Dec. 1. This is equivalent to a rollback of P70 per 11-kg household cylinder,” the company said.

EC Gas, the liquefied petroleum gas arm of Eastern Petroleum, previously announced a minimum price rollback of P5 per kilo effective 6 a.m. Nov. 30.

It said this worked out to P55 off per 11kg cylinder.

LPG will now sell from P543 to P795 in Metro Manila as prices vary depending on the brand, location and market forces.

The second LPG price rollback followed the 7th consecutive oil price rollback early this week where oil companies cut the price of gasoline by P1.10 per liter, kerosene by P2.10 per liter and diesel by P2.30 per liter.

The Department of Energy attributed the lower prices to the continuing oversupply of petroleum products in the world market.

Despite the recent declines, year-to-date adjustments show the price of gasoline going up P2.60 per liter, and diesel, P6 a liter.

Presidential Spokesman Salvador Panelo said President Rodrigo Duterte was now considering the recommendation from his economic managers to scrub a plan to suspend an increase in the excise tax for fuel in January 2019.

The officials had earlier recommended a suspension of the excise tax increase to curb inflation, then took back the idea even before it was implemented as world oil prices declined.

“The President is studying the recommendation,” Panelo said in a text message.

The Tax Reform for Acceleration and Inclusion or TRAIN Law provides for a yearly increase in the excise tax on fuel products but allows these increases to be suspended if the average price of Dubai crude reaches or exceeds $80 per barrel for three months.

Finance Secretary Carlos Dominguez III said Thursday that Dubai crude oil prices have gone down by 14 percent from an average of $79 per barrel in October down to $68 per barrel in November.

But Senator Juan Edgardo Angara said the latest price rollbacks were hardly felt by Filipino families.

“We recognize that international prices of petroleum have been going down and will continue to decline in 2019. This led to seven consecutive weeks of price rollbacks, with pump prices of gasoline and diesel decreasing by P9.85/liter and P8.40/liter, respectively,” Angara said.

“However, these oil price reductions have to be felt by Filipino families. Rollbacks should not end here. These should be followed by a rollback in inflation or the price of prime commodities. Prices of

basic goods should also go down simultaneously with the price of oil,” Angara said in Filipino.

Senator Aquilino Pimentel III, meanwhile, warned against the plan to impose the new round of excise taxes on fuel, describing inflation as a “dangerous phenomenon which should be slain on sight when it rears its ugly head.”

“Hence our eco[nomic] managers should make up their minds on whether to fight inflation or pursue revenues. I suggest we fight inflation now,” Pimentel said.

Senator JV Ejercito urged Duterte and the country’s economic team “not to walk back on their decision to lighten the load [on] Filipino families.”

“Now that our countrymen have breathed a little, we will slap them with a new round of taxes that will undoubtedly push the prices of basic commodities up,” he said, saying the government should bite the bullet for the sake of the welfare of a majority of Filipinos.

The IBON Foundation research group warned that maintaining the scheduled excise tax on fuel would keep inflation high in 2019.

An increase in the excise tax on fuel would increase costs of production and create a domino effect that would sustain the high prices of goods and services, IBON said.

The poorest 60 million Filipinos have already endured real income losses between P2,500 and P6,800 due to worsening inflation since early 2018, it added.

The group said it is premature to think that oil prices would stay low or that the peso would not continue to depreciate since the prices of oil continue to remain volatile.

It said the government should stop imposing higher consumption taxes amid low wages and increasing unemployment, and should instead go after tax evaders and stop corruption in the ranks of the Bureau of Customs to increase collections.

READ: P2-pump price rollback seen

Topics: liquefied petroleum gas , Petron Corp. , Eastern Petroleum , Salvador Panelo
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