ENERGY SECRETARY ASSURES ADEQUATE OIL SUPPLY UNTIL OCTOBER
MANILA, August 5 , 2004 (STAR) By Donnabelle L. Gatdula - While admitting that domestic oil prices will continue to rise in the next few days, Energy Secretary Vincent S. Perez assured yesterday that the Philippines has enough supply of oil until October this year.
"We do not have a supply problem at this time. We are dealing with price issue," he said, in a press conference.
To date, the country has an oil inventory of 56 days. Of this oil stock 43 days worth of supply are in the country additional supply are currently in transit.
Perez added that the Department of Energy (DOE) has no plans of altering the minimum oil requirement imposed on oil companies. "We have not changed the minimum inventory of oil firms since the Iraq war," he said.
The energy chief said they also do not intend to reduce the excise tax and tariff imposed on petroleum products to ease the burden of rising crude prices.
"We have a budget deficit that we have to be sensitive to. Reducing taxes and tariff on petroleum products will only create artificial prices. Our taxes and oil prices are the lowest in the region. Besides, this will discourage fuel conservation," he said.
As of Aug. 3, gasoline pump price in peso per liter averaged P25.73 compared to Hong Kongís P84.74; South Korea (P65.27); Singapore (P48.99); New Zealand (P44.81); Australia (P41.33); Cambodia (P36.25) and Thailand (P26.10).
Perez said an inter-agency task force will study how to minimize the impact of soaring oil prices through conservation measures.
At the same time, he clarified that Executive Order 336, which increases the tariff on petroleum products from three percent to five percent signed by President Arroyo on July 23, has not yet taken effect.
The energy official, however, said he was not sure if they would be able to implement the EO within the period prescribed by law or 15 days after its publication. "We continue to monitor prices and when will be the appropriate timing to implement it," he said. "We are currently drafting the implementing guidelines which will identify the trigger mechanism."
On the impending increase in liquefied petroleum gas (LPG) prices this week, he admitted that LPG contract prices are likewise on the upward trend.
"LPG has been enjoying less taxes. In a way it is based on socialized price. But we have to note that LPG contract prices have gone up to $344 per metric ton in August as against $327 in July. So far, a major LPG player has not increased its LPG prices. I urged the consumers to exercise the power of choice," he said.
Oil firms have sounded off plan to raise their LPG prices anew by P1 per kilogram within this week. Most have increased prices recently by 80 centavos per liter, except for Petron.
On the proposal to sell down shares of Petron to ease the impact of rising oil prices, Perez said the partnership of PNOC Philippine National Oil Co.) and Saudi Aramco in Petron has transformed the deregulated industry into a more competitive market environment.
"We will note that up to now, while other oil firms have raised their prices by 50 centavos early this week, Petron has not yet moved its prices. Despite this, Petron remains profitable. This means that Petron is able to balance the need to make money and the national interest" he said.
"There is no need to sell the 40 percent share or a portion of PNOCís shares in Petron. It is a strategic investment," he added.
Reported by: Sol Jose Vanzi
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