(STAR) By Donnabelle Gatdula - The “Big 3” oil companies reduced their gasoline and diesel prices by P5 and P2 per liter, respectively, in their biggest cuts yet since world oil prices started falling.

Petron Corp., Pilipinas Shell Petroleum Corp. and Chevron Philippines (formerly Caltex) cut their prices effective today after small oil players implemented a rollback of up to P6 per liter earlier this week.

Virginia Ruivivar, Petron public affairs manager, said they have reduced since August this year their gasoline and diesel prices by P24.50 and P21.50 per liter, respectively.

PTT Philippines Inc. also followed the oil majors’ move.

To catch up with the prices of competitors, Seaoil rolled back anew its gasoline products by P4 per liter and kerosene by P1 per liter.

Eastern Petroleum Corp. the other day rolled back the price of its diesel by P1 per liter and P3 per liter for gasoline. Total, on the other hand, has reduced pump prices of gasoline and diesel by P5 and P2 per liter, respectively.

Fernando Martinez, Eastern chairman, said the move would bring down their diesel price to P36 per liter and its gasoline to P38.07.

“This brings to P4 the total rollback for diesel and to P6 for gasoline products for November,” he said.

Energy Secretary Angelo Reyes lauded the oil players’ move to further reduce their pump prices.

Reyes, who is scheduled to call a stakeholders’ meeting with the oil firms early next week (Tuesday), believes that there would be more oil price cuts in the coming days.

Consumer and Oil Price Watch chairman Raul Concepcion, meanwhile, said that oil refiners Shell and Petron, and oil importers Caltex, Total, Seaoil, Flying V, and others agreed that there are no more under-recoveries as of Oct. 31.

“Starting November 1 thereafter, their rollback or increase will be based on the moving six weeks weighted average of Dubai crude for Shell and Petron,” Concepcion said.

The July peak price for Dubai crude was $140 per barrel and the six-week weighted average from Oct. 17 to Nov. 21 is $56.76 or a drop of $83.24 or 59 percent. The average forex is P48.80.

Concepcion said the pump prices should reflect this price reduction.

“We expect a rollback on diesel and gasoline by at least P6 in two tranches, or P3 for the week of December 5 and another P3 for the week of December 12, or a total of P6,” he said.

In the case of the new players, he said the moving four weeks weighted average as of Nov. 21 is $56.03 for unleaded gasoline and $76.57 diesel, which the pump prices should also reflect.

As of Nov. 25, 2008, average-to-date price of Dubai crude dropped to $50 per barrel from $67 per barrel in October.

Based on the Department of Energy (DOE) monitoring, gasoline and diesel prices at the Mean of Platts Singapore (MOPS), benchmark of oil importers, declined to $49 and $74 per barrel respectively as of Nov. 26 compared to $80 per barrel and $89 per barrel, the previous month.

DOE noted that crude prices dipped further last week at an average of about $5 a barrel, reaching the lowest level in three and a half years, as the market was weighed down by weak energy demand.

Big 3 need to explain

Despite this development, Sen. Gregorio Honasan, new chairman of the Senate committee on energy, vowed to summon in an inquiry DOE officials and the Big 3 oil players to explain why they have not reduced oil prices despite the downtrend of fuel prices worldwide.

Honasan said the public interest is the paramount concern of the Senate committee in pushing for the inquiry

“What’s at stake here is the public interest, so we will have to look at that issue in the light of that consideration. Second, we want to find out how we will brace ourselves not only for the energy crisis but the instability in oil prices that affects almost all aspects of our economy, especially the marginalized or the poor,” Honasan said.

He said he wants to hear what the DOE officials and the representatives of Shell, Petron and Chevron/Caltex will have to say about the issue.

“We want to clarify the issues first, and find out from them what they have to say on the issue, why they refused to make public their record books when they are earning too much to the detriment of the public interest,” Honasan said.

Senators Loren Legarda and Francis Pangilinan, on the other hand, also called on Shell, Petron and Caltex to give a one-time big-time rollback on oil prices following the P3 rollback by independent players Unioil and Eastern Petroleum.

“We don’t see any reason why the Big 3 can’t give our consumers a big rollback when other oil companies have already done so. It is time to yield to the demands of transport and consumer groups,” Pangilinan said.

Legarda yesterday urged the top three oil companies operating in the country to follow the example of small player Unioil in slashing the pump prices of gasoline and diesel by about six pesos.

Unioil Petroleum Philippines Inc. reduced its diesel price by P6 per liter for an equivalent pump price of P34.97 per liter. Gasoline prices were reduced by P4, resulting in a retail pricefor unleaded fuel at P38.49, premium at P38.99 and regular at P36.21

Unioil last slashed its pump prices by P6 for diesel and P2.50 for gasoline on Oct. 30.

Legarda pointed out that since oil players in the country pay the same taxes and have about the same procurement costs of the fuel they sell to end users, she sees no reason why Caltex, Shell and Petron cannot reduce their prices substantially.

She said that at the time when oil was selling at about $145 per barrel in the world market, local pump prices for gasoline hovered around P60 per liter.

“You do the math,” Legarda said. “World oil prices had hit below $50 a barrel, yet we do not see a commensurate rollback in the local pump prices of gasoline and diesel.”

She said that while the oil industry has been deregulated, government should still guard against predatory pricing schemes, if indeed these are being resorted to.

Legarda warned that pump-price reductions borne by oil prices hitting the $50/barrel mark should not just be set aside if the prices of crude oil should climb again due to speculations and the slashing of production of the Organization of Petroleum Exporting Countries (OPEC).

Crude oil was trading at around $54 per barrel and as high as $66 a barrel yesterday depending on the index.

Legarda also appealed to the oil players to practice corporate social responsibility by providing consumers rollbacks that are at par with the reduction in the prices of crude oil.

“Any major oil rollback will lessen the transportation cost of goods and our working class, thereby stimulating the economy,” she said. “It will be much appreciated by the people.”

Legarda’s admonition to the oil players was echoed by transport groups, including the Pinagkaisang Samahan ng Tsuper at Operator Nationwide, which said if one oil company can reduce prices substantially why not the so-called Big 3.

The transport group had just held a strike in the Bicol region, forcing the suspension of classes there.

Pangilinan also called for the 48-hour boycott of the big three oil companies in the country last month following their refusal to lower prices despite the dramatic plummeting of international costs.

“The public is not stupid. There is no acceptable excuse for their refusal to grant a one-time big-time rollback,” Pangilinan said.

“It is time for the big players to show some sensitivity to our consumers... We also challenge the government to step in and protect our consumers’ interest because we cannot expect the Big 3 to do so,” he added. – Christina Mendez

Chief News Editor: Sol Jose Vanzi

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