Manila, Jan. 17, 2003 (Malaya) - The Department of Energy (DoE) yesterday warned of another round of oil price increase as world oil prices have soared in the last few days.

DOE monitoring showed that Dubai crude, the benchmark used in pricing of oil in the country is now averaging $27.02 per barrel (between January 2 to 15), the highest in two years.

Dubai crude peaked to its highest Wednesday (Jan. 15) to $27.89 per barrel from $27.30 per barrel the other day.

This despite the decision of the Organization of Petroleum Exporting Countries (OPEC) over the weekend to raise production by 1.5 million barrels per day. The increase in oil production was meant to help bring oil prices to reasonable levels.

The international oil cartel held an emergency meeting last Sunday from which they decided to increase output to compensate for the supply losses resulting from a strike in Venezuela.

The other factor seen triggering some fluctuations in world oil prices is the looming war between United States and Iraq.

Energy Secretary Vince Perez said it is unfortunate that market response shows that the January 12 OPEC decision has failed to arrest the increasing trend of global oil prices.

He noted reports that the international oil market has not responded to market fundamentals such as the increase in production instead to the continuous threat of a US-led war against Iraq pushing prices up.

The energy chief also said the on-going strike in Venezuela, which is on its 45th day, has exerted pressure on the price and supply of oil.

Venezuela is the world's fifth largest oil exporter.

"The world price of oil has recently become too erratic in response to the different world events. Given this scenario, our local oil prices may not be isolated from global trends. We might see domestic oil prices follow the same trend of the international oil prices," he said.

At the same time, Perez urged local oil companies not to take advantage of the situation and instead seriously study the market condition.

Secretary Perez assured that the DOE will continue to closely monitor the developments in the international and local oil markets.

But local oil companies have earlier said that by next week, they would have to raise pump prices anew to reflect their costs relating to their compliance to gasoline quality standards mandated under the Clean Air Act.

To date, diesel prices which are at a range of P14.05 to P15.37 per liter; are still below the self-imposed ceiling by the transport groups.

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