DOE asks oil companies to explain latest price adjustments

Ralf Rivas
DOE asks oil companies to explain latest price adjustments
The Department of Energy says oil firms could have implemented even lower rates this week, but did not do so

MANILA, Philippines – Oil companies implemented price rollbacks for gasoline and diesel this week. The Department of Energy (DOE), however, said the adjustments could have been lower.

The DOE issued a show-cause order to 13 oil companies, giving them until next Monday, October 7, to explain how they came up with the rollbacks implemented last Tuesday, October 1.

Most oil companies reduced prices of gasoline by P1.45 per liter, diesel by P0.60 per liter, and kerosene by P1 per liter. Some implemented bigger cuts for gasoline, while other firms implemented lower adjustments for diesel.

The computations by the DOE and oil companies have historically been the same. This week, for the first time in recent years, there has been a difference.

“Mas mababa po ‘yung rollback nila by about 22 cents for gasoline and about .06 cents for diesel, and we want them to explain it,”said Energy Assistant Secretary Leonido Pulido III.

(Their rollback was lower by about 22 cents for gasoline and about .06 cents for diesel, and we want them to explain it.)

“Hindi naman po namin sinasabi na mali sila, but we want to give them the opportunity to explain to us bakit po ganoon,” he added.

(We’re not saying they’re wrong, but we want to give them the opportunity to explain to us how they came up with the figures.)

Meanwhile, liquefied petroleum gas (LPG) had increased by P4.50 per kilo, while auto LPG went up by P2.50 per liter.

“When we computed kung magkano po dapat ‘yung iaakyat ng presyo ng LPG this week or this month, mas mataas po ‘yung iaakyat ng produkto na LPG kumpara sa dapat iakyat niya compared po sa international world market at sa sinusundan po natin na tinatawag natin na Mean of Platts Singapore,” Pulido said.

(When we computed the amount of increase for LPG this week or this month, companies implemented higher rates for LPG as compared to the international world market prices and to what is called the Mean of Platts Singapore, which we follow.)

Under the oil deregulation law, the government cannot dictate on prices set by oil companies.

However, the DOE and the Department of Justice can investigate anticompetitive practices.

The discrepancy comes as the DOE pushes for oil price unbundling, where companies would be required to provide a breakdown of import costs, tariffs, and other expenses that affect changes in oil prices.

Oil companies oppose the move as it would reveal trade secrets. – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.