|Danny Arao online|
At around midnight today (May 11), Caltex increased oil prices by as much as 17 centavos per liter. Other oil companies are expected to follow suit later in the day.
Given that a 50-centavo oil price hike happened last April and assuming that oil companies increase pump prices by an average of 20 centavos per liter, oil firms stand to earn additional revenues of at least P45.5 million per day. This IBON computation is based on a projected consumption of about 65 million liters everyday for 1999.
Analyzing the new pump prices, it is clear that the promise of lower prices from oil deregulation remains unfulfilled even after three years of deregulation of the downstream oil industry.
While deregulation ushered in rollbacks and increases since 1996, it cannot be denied that pump prices of most petroleum products are currently much higher compared to the time when there was no automatic pricing mechanism (APM). An comparison of pump prices of Caltex then and now is opportune at this point.
Premium gasoline now sells at P12.25 per liter compared to the pre-APM (automatic pricing mechanism) level of P9.50 per liter. The same is true for unleaded gasoline which posted a P2.38 increase from the previous P9.50 per liter to the current price of P11.88 per liter. Regular gasolines pump price prior to deregulation was only P9.00 per liter, but now it sells at P10.50 per liter.
Diesel, consumed mostly by jeepney drivers, is now sold at P8.50 per liter, a far cry from the pre-APM level of P7.03 per liter. Kerosene also had a slight increase from the previous level of P7.03 to the current P7.15. However, LPG had a decrease of P4.63 as the current price of P140.52 per 11-kg cylinder is much lower than the pre-APM level of P145.15.
It may be recalled that automatic pricing under oil deregulation started in August 1996 under Republic Act (RA) No. 8180, the first oil deregulation law. The oil industry temporarily reverted to a regulated regime for about three months (i.e., November 1997 to January 1998) when the Supreme Court declared unconstitutional RA 8180. The effectivity of the second oil deregulation law (Republic Act No. 8479) in February 1998 marked the return to a regime of free competition and automatic pricing in the downstream oil industry.
Indeed, oil deregulation has proven to be more of a bane rather than a boon to Filipino consumers. Notwithstanding allegations of overpricing and cartelized operation, oil companies still go about their merry ways as they rake in superprofits as a result of deregulation.
Pump Prices of Caltex
Source of basic data:
Energy Regulatory Board and Caltex May 11 media statement (as
released by various newspapers)
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