BIOFUELS LAW: 30-50˘ HIKE IN DIESEL PRICES SEEN
MANILA, APRIL 22, 2007 (STAR) By Donnabelle L. Gatdula - The implementation of the Biofuels Law next month may result in 30 centavos to 50 centavos per liter increase in fuel.
This was the estimate released by Total Philippines Corp. president and managing director Anna Whitehouse.
"The impact of the implementation of Biofuels Bill will be 30-50 centavos. We are still negotiating with the suppliers. This estimated impact on diesel pump prices may change depending on the results of the negotiations," Whitehouse said.
Whitehouse said that while they are ready to follow the law, they will not absorb the impact of the Biofuels Law on fuel prices.
30-50˘ hike... From B-1
"As for our part, we are already subsidizing the fund to comply with the law. We can’t subsidize the impact on consumers," she said.
She said they are talking with at least three suppliers. "We will be in complying with the law before the May 6 schedule," Whitehouse said.
The projected impact to be passed on to consumers immediately on May 6 is contrary to earlier pronouncement of the government that the implementation of the Biofuels Bill will not affect the prices of diesel and gasoline.
Energy Secretary Raphael Lotilla, for his part, said the impact would depend on the price of CME and diesel at the time of the implementation.
"We still have a few more days to see if there would be an impact," Lotilla said.
At present, Shell sells its pre-blended bioethanol or E-10, 50 centavos below gasoline products’ prices.
The Biofuels Law was passed into law last January 2007.
The law mandates a one percent blend of CME to diesel products and five five percent blend of ethanol on gasoline in two years time.
Oil companies, including Total, have been setting aside funds to be able to comply with the Biofuels Act.
As this developed, Total will be introducing Auto LPG on tricycle.
The conversion unit will amount P10,000 to P12,000.
Total is in a trial run right now and is expected to be go on full blast before the end of the year.
Strong forex inflows may trigger surge in inflation – BSP By Des Ferriols The Philippine Star 04/23/2007
After announcing that it was mopping up liquidity beginning next month, the Bangko Sentral ng Pilipinas (BSP) said its projections showed imminent inflation surge over a one-year period due to strong foreign exchange inflows.
The BSP said over the weekend that although the current domestic money supply situation did not pose a threat to the present inflation rate, projections are showing prolonged rapid growth.
BSP Governor Amando M. Tetangco Jr. told reporters that it was this risk that the Monetary Board saw as something that needed to be addressed to remove the inflationary pressures down the road.
"We’re looking here at the same policy horizon of 15 months to two years," Tetangco said. "So that is an indication that the effects of what we have done would take time and needed to be done this early before the potential risks become real problems, he added."
The BSP last week announced that it would take steps to arrest the rapid growth in money supply by luring government deposits away from banks while keeping all its monetary policy settings unchanged.
The new measures, according to Tetangco, were expected to ultimately slowdown the growth in domestic liquidity to below 20 percent, a level that the central bank said it considered "sustainable and not inflationary."
Although the economy appears to be able to absorb the additional liquidity from strong foreign exchange inflows, however, there is now growing concern over a prolonged acceleration of the growth in money supply.
Domestic liquidity growth continued to surge in February, expanding by 22.4 percent. This was only marginally slower than the 22.8 percent growth rate recorded in January this year.
The new measures, according to Tetangco, are expected to slowdown the growth in domestic liquidity to below 20 percent, a level that the central bank said it considered "sustainable and not inflationary".
The policy, however, came within less than six months of the BSP’s decision to tier the rates on bank placements with the BSD, a move that was estimated to have resulted to monetary easing by at least 200 basis points.
Chief News Editor: Sol Jose Vanzi
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