Pump prices are expected to rise this week, with diesel and gasoline going up by 70 and 80 centavos a liter amid reports that the Organization of Petroleum Exporting Countries has started cutting production early.
“Expect fuel prices to go up again next week,” Unioil Philippines said on its official Twitter account Saturday. “Diesel and gasoline should go up by P0.70 – P0.80 per liter.”
The impending price hike comes after 11 consecutive weeks of reduction for diesel and kerosene prices, and three successive weeks for gasoline.
Meanwhile, Senator Sherwin Gatchalian suggested the removal of the $80-per-barrel threshold needed to suspend excise taxes on fuel to give the government more flexibility.
“Let us not wait for $80. If we wait for $80, many will be hurt, Gatchalian said in an interview on radio dzBB.
He also said the government should study good timing in suspending excise taxes on fuels.
“Timing is important in tax reform. And in many countries, they are looking at the forecast, the timing. They are not just imposing [new taxes],” he added.
The second round of increases in fuel excise taxes went into effect Jan. 1, as provided for by the Tax Reform for Acceleration and Inclusion (TRAIN) law.
READ: Opec: Oil prices to recover early 2019
Gatchalian said that they can no longer do anything about that, it is important that the Department of Trade and Industry and the Department of Energy monitor prices.
For example, he said, petroleum companies cannot impose an increase until after 15 days because it is their mandate to store oil for 15 days.
“It is the mandate of the DOE to ensure that there is enough supply of oil for the country,” he said.
He said so far, the DOE has monitored gas stations and issued warnings to some of the for increasing their prices.
Gatchalian on Saturday proposed the creation of an anti-profiteering task force to guard against oil price increases.
The DOE said over the weekend it hopes to release a circular on monitoring and unbundling of prices of petroleum products by the first quarter as part of moves toward price transparency.
Energy Undersecretary Felix William Fuentebella said the circular will still undergo one more public consultation before it is released.
DOE wants to unbundle oil price components including the industry take or profits of the oil companies. The oil industry is deregulated, which means any movement in oil prices does not require prior government or regulatory approval.
“For the cost component, at least we got the eight major components…We agreed on the seven, what we are still discussing now is the industry take,” Rino Abad, director of the Oil Industry Management Bureau said.
Under the circular, which will be known as the Guidelines for the Monitoring of Prices on the Sale of Petroleum Products by the Downstream Oil Industry in the Philippines, oil companies are required to unbundle and provide an explanation for the oil price adjustment.
“Oil companies shall strictly comply with the submission of the formal notice of price adjustments per liter for liquid fuels and per kilogram of LPG (liquefied petroleum gas) as required in Section 2, containing the computation and the corresponding explanation of the unbundled cost items of all products subject for sale,” the draft circular states.
The circular shall apply to all persons or entities engaged in the sale of gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil and household and automotive LPG.
The oil companies will be required to submit to the DOE the breakdown of its price movement which includes product cost, freight cost, insurance, foreign exchange rate, duties, taxes, biofuel cost and industry take.
It said retail outlets must also submit if required, their computations with corresponding explanation of the price of all petroleum products sold in a specified period including product cost, hauler’s fee, taxes and retailer’s take.