OIL PRICES UP ANEW; 7TH TIME THIS YEAR

MANILA
, June 5 , 2004
 (STAR)
By Donnabelle Gatdula   -  For the seventh time this year, several oil companies will raise pump prices by 90 centavos per liter.

The price increase takes effect today.

Independent or new oil players have projected that pump prices may go up to P30 per liter in the next few weeks if the situation in the United States and Saudi Arabia worsens.

Total was first to raise its prices by an average of 90 centavos per liter.

Pilipinas Shell Petroleum Corp. said it would adjust prices by 90 centavos by 8 last night "as a consequence of the prevailing high prices in the world market."

The last time the oil companies raised their prices by P1 per liter was on May 16.

Officials of Petron Corp. and Caltex Philippines Inc., two of the countryís top three oil companies, said they were still studying their figures and had no immediate plans of adjusting their prices.

At a press conference, some members of the Independent Philippine Petroleum Corporations Association (IPPCA) announced their decision to raise prices by 90 centavos to P1.05 per liter due to the continuing rise in global oil prices.

Eastern Petroleum Corp. (EPC), Unioil Philippines, and Seaoil Philippines Inc. adjusted their prices by 90 centavos per liter on all products last night, while Flying V implemented an increase of P1.05 per liter.

The average Dubai crude, the benchmark being used by local oil refiners in pricing their products, reached $35.44 per barrel compared to the May average of $34.77 and Aprilís $31.68.

The continuing volatility of the peso against the greenback also prompted the oil firms to adjust prices.

The peso-dollar exchange rate average for June 1-3 stood at 55.72 to a dollar as against 55.72:$1 in May and 55.94 to the greenback in April.

Independent players said they need to recoup a total of P1.36 for each liter of diesel and P1.62 for gasoline, representing undercoveries from November 2003 to May 16, 2004.

The prices of liquefied petroleum gas (LPG) are also likely to increase by P1 to P1.50 per kilo within this month.

Seaoil president Glenn Yu said the OPECís (Organization of Petroleum Exporting Countries) decision to raise its production by another two million barrels per day from a quota 25.5 million BPD will not have any impact on local oil prices.

"They just legitimized what they are actually producing right now," he said.

"The OPEC has just put on paper what they are actually doing right now and there is no new oil coming into the market.

"OPEC membersí quota is between 25.5 and 26 million barrels before the supposed hike in oil production," he added.

Yu said the prices of finished products increased by about 21 percent since the start of the year, and gasoline prices in the region have gone up by 42 percent based on year-on-year data.

The latest oil price hike was lower than what was expected by the Consumer and Oil Price Watch (COPW) but this should have been implemented at a later date.

COPW chairman Raul Concepcion projected that by the third week of this month there will be another P1.25 to P1.80 per liter increase in the pump prices of oil products.

In a fax message from the United States, Concepcion said oil refiners Petron Corp. and Pilipinas Shell Petroleum Corp. are expected to jack up gasoline prices by P1.25 per liter and 95 centavos for diesel on or before June 20.

"This is because Dubai crude increased in May by $3.06 per barrel (May $34.74 vs. April $31.68), while the peso appreciated by 11 centavos (May P55.83 vs. April P55.94)," he said.


Reported by: Sol Jose Vanzi

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