The Department of Energy (DOE) said fuel price rollbacks can only be sustained if the United States will pursue its reported planned Federal Reserve rate hikes.
DOE’s Oil Industry Management Bureau director Rino Abad at the during the Laging Handa briefing yesterday, said continued pandemic related lockdowns in China will also help in pulling down petroleum prices.
“The US Federal Reserve has an ongoing plan for a policy rate review from July 26 to 27.
One of their considerations is to have interest hikes and if they do that, more central banks will follow and it will become a global action. If that happens, it will be a favorable (cause) for oil price rollbacks to continue. If that decision does not happen, we will have to observe as rollbacks may not be sustained,” Abad said.
Oil prices have been in a downward trend for the last three weeks.
According to the DOE data, average Manila price per liter as of July 14 stood at P80.60 for gasoline; P81.60 for diesel and P85.02 for kerosene. Meanwhile, year-to-date adjustments on petroleum prices as of July 12 summed up to a net increase of P24.30 per liter for gasoline, P36.80 per liter for diesel and P30.05 per liter for kerosene.
Abad said the DOE continues to champion for amendments in the Oil Deregulation Law with the members of the incoming Congress.
Abad said the DOE proposes to institutionalize the role of commercial fuel retailers in keeping a minimum inventory reserve that is designed to anticipate supply disruptions.
He said the DOE wants a mechanism where players are compelled to explain to the government their pricing computations and methods to justify their price adjustments.
“If we can have the authority to secure such data, we can have an analysis why places like Palawan, Baguio and more recently Boracay, have higher prices of fuel products. If we have that data, we can also correct if the (prices) are too high. The basic premise also is we cannot understand the process unless we get the details on how they compute their (oil companies) prices,” Abad said.
The DOE in 2019 issued a circular that unbundles retail prices of fuel to encourage transparency in the sector but was not implemented after it was questioned in court for allegedly being inconsistent with the Oil Deregulation Law.
