MANILA, JUNE 18, 2006 (STAR) By Donnabelle Gatdula - Oil giants Pilipinas Shell, Petron Corp. and Chevron (Caltex Philippines) and newcomer Total again raised the prices of gasoline and kerosene by 50 centavos per liter effective yesterday.

At the same time, the oil companies reduced the prices of diesel by 50 centavos, heeding President Arroyo’s call to keep prices at their current levels.

The President said she expects prices of diesel and liquefied petroleum gas to remain the same with the reduction of tariffs on imported petroleum products and the drop in contract price of LPG in the international market.

However, one gas station, Shell’s on Quirino Avenue in Malate, Manila, increased the prices of LPG by P7 per 11-kilo tank at 6 a.m. yesterday.

LPG Marketers Association president Arnel Ty said LPG prices are expected to increase by at least P6 per 11-kilo cylinder today.

Zenaida Monsada, director of the Department of Energy’s Oil Management Bureau, said on Friday that major oil players would not follow the move to increase LPG prices.

Energy Secretary Raphael Lotilla said the impact of the tariff cut would keep prices of diesel stable at least for the remainder of June.

"Oil companies and President Arroyo agreed in principle that whatever benefits (come) from tariff reduction will be passed on to customers," Lotilla said.

He said the oil giants have decided to concentrate the impact of the tariff reduction on diesel products.

"If we will spread it on all products, the impact will only be 25 centavos per liter. And our priority is the public transport sector," Lotilla explained.

The reduction on tariff duties is one of the mitigating measures carried out by the government to cushion the impact of continuing rise of global oil prices.

As of June 15, Dubai crude, the benchmark being used by oil refiners, averaged $65.38 per barrel as against May average of $65 per barrel and April’s $64.14.

On the other hand, gasoline prices using the Mean of Platts Singapore, the pricing mechanism being followed by oil importers, averaged $84.06 per barrel as of June 15 compared to May’s average of $86.80.

MOPS diesel averaged $88.47 per barrel, slightly lower than $87.63 per barrel in May.

LPG contract price, on the other hand, has maintained at P470 per metric ton for June.

Oil companies said they would need to recover P1 to P2 per liter in losses depending on the impact of the tariff reduction.

It was not certain if the expected increase of P1 to P2 per liter would be applied to gasoline and the impact of the tariff reduction would absorb the supposed increases on diesel prices.

On top of the tariff reduction impact of 50 centavos per liter, the P1 per liter discount on diesel will be maintained by the oil companies at their selected retail gas stations.

Chief News Editor: Sol Jose Vanzi

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