(STAR) By Donnabelle Gatdula - Fuel supply is expected to normalize in a week even as pump prices are likely to jump as oil firms prepare to recoup losses from rising global crude costs.

Pilipinas Shell Petroleum Corp. country chairman Edgar Chua said price adjustments would depend on market forces or on the movement of global crude costs.

Asked when supply would normalize, Chua said, “Maybe in a week’s time or so. Our estimate is it will be a week.”

“The amount to be recovered will be determined by the market. Assuming an adjustment will have to be made next week, it will also depend on what will happen in the market price this week. So that could adjust or reduce the amount,” Chua said.

“It’s a combination of recoveries plus the effect on the price this week, and the depreciation of the dollar against the peso. So it will be the market that will dictate this,” he added.

Shell, together with two other oil giants Chevron and Petron, raised their pump prices yesterday by P2 per liter for gasoline, P1.50 for diesel and 85 centavos for kerosene.

Earlier, small oil firms Eastern Petroleum, Flying V, and Phoenix Petroleum announced their own price hikes ranging from P1.50 to P2 per liter.

Shell launched yesterday a multimillion-peso calamity assistance program, which involves offering discounts for fuel and LPG purchase as well as greater support for social development programs in selected areas in Benguet, Baguio City, Pangasinan, Eastern Laguna, Rizal, Ilocos Norte, Ilocos Sur, Mountain Province, Isabela, Cainta, Marikina City, Malabon and Pasig City.

Under the program, Shell will give P2 per liter discount on diesel and P1.50 per liter on premium, unleaded and regular gasoline to drivers of public utility vehicles through its existing Shell “Pepeng Pasada” loyalty program until Dec. 31.

Shell will also extend P25-million worth of vocational scholarships to qualified dependents of jeepney drivers through the “Gas Mo Bukas Ko II” program.

P400-M losses

Chua also set Shell’s estimated losses from the recent price cap on petroleum at P400 million.

The price cap, stipulated in Executive Order 839, required oil companies to keep their prices at Oct. 15 levels.

President Arroyo lifted EO 839 over the weekend and replaced it with EO 845 requiring oil firms to give assistance to calamity stricken areas.

“Petron is one with the Filipino people in rebuilding the nation with its calamity discounts – reduced fuel prices available in areas badly hit by the recent typhoons,” Petron president Eric Recto said.

“Prices of automotive and motorcycle lubricants sold at our stations are also discounted. This is our way of keeping Petron’s commitment to serve you in every way we can,” he said.

Petron’s fuel discounts will last until Nov. 30 while oil discounts will be in effect until Dec. 31.

Flying V, for its part, has provided 30,000 relief packages amounting to P6 million to calamity areas.

Joey Cruz, Flying V spokesman, said they also assisted a United Nations world food program by refueling helicopters used in distribution activities in affected areas.

Price cap revival

President Arroyo will not hesitate to re-impose price caps on petroleum products in the event of abuse or unfair business practices by the oil companies.

Executive Secretary Eduardo Ermita said that despite the lifting of EO 839, the government has other “legal tools” to check unfair pricing practices.

He pointed out the joint task force of the Department of Justice and the Department of Energy “continue to exist within the flow and therefore can always be activated to check into the unreasonable increase of prices.”

“I know that the concern of the people is with the lifting of EO 839, we are back in essence to the Oil Deregulation Law. But don’t forget that even without EO 839, the government was not left without legitimate means of overseeing that there will be no abuse under the Oil Deregulation Law,” Ermita told a news briefing.

He recalled that even Justice Secretary Agnes Devanadera had warned oil companies that she would look into their books to see if there was justification for price increases.

He reminded the oil firms of their commitment not to increase their prices abruptly after the lifting of EO 839.

If the latest price hikes were found to be unjustified, “then nothing would prevent the President from resorting again to an EO that will return the effect of EO 839,” Ermita said.

He said Trade Secretary Peter Favila, who chairs the National Price Coordinating Council, has informed him that teams have been sent to key areas in the country to “check on the ill-effects of the increase of prices of oil and fuel on basic commodities.”

“If there is such an unreasonable increase (in the prices of basic goods), then definitely, the price teams of the DTI will also take notice and take measures to ensure that there will be no unreasonable increase in the prices of basic goods and commodities,” he said.

Ermita said the government has opted to put on hold an actual inventory of fuel in depots so that it would not be accused of exercising too much power.

“But we are not oblivious to these (reports of shortage),” he said.

The oil firms had been suspected of hoarding fuel when EO 839 was in effect. – With Paolo Romero

Chief News Editor: Sol Jose Vanzi

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