Sixth oil price hike this year takes effect

Pump prices are up again this week for the sixth time since the start of the year, with gasoline prices rising by 10.50 per liter; and diesel, by 10.35 per liter.

Kerosene products – generally used for lighting needs in rural areas and also a base for aviation fuel – will go up by 10.60 per liter this week, oil companies said.

As of press time, oil industry players that have already announced price adjustments are Flying V and Pilipinas Shell Petroleum Corporation. Their price hike takes effect at 12:01 a.m. and 6 a.m., respectively, today (February 6).

Other oil companies are expected to follow the price adjustments.

Adding increases from excise taxes due to the Tax Reform

for Acceleration and Inclusion (TRAIN) Act, diesel prices have already soared by as much as 15.90 per liter since January 1; and gasoline by 15.12 per liter.

With the weekly climb in prices, the Department of Energy (DOE) is enforcing a stricter policy on providing explanation to pricing adjustments of oil companies – and to the extent possible, the industry players are also mandated to unbundle or itemized their costs being passed on at the pumps.

“We require them (oil companies) to make public announcement for any pump price adjustment – whether it’s an increase or decrease, including the reason for such adjustment,” said DOE Assistant Director Rodela I. Romero.

Romero qualified that the DOE “will not stop on validating their (oil firms) adjustments so our consumers will be well protected – and this is for the sake of transparency also.”

She said the DOE will issue a Circular on this particular policy following formal consultation with relevant stakeholders, hence, the target on formal implementation of pump costs unbundling will likely be March this year.

She noted that Undersecretary Donato D. Marcos “has already started requiring oil companies to do their respective public announcements on pricing adjustments,” and whenever feasible, they must have a spokesperson to do so.

On cost unbundling, Romero noted that the oil companies must flesh out the components, not just the usual swing in international prices as the routine justification being dangled to the media and the public.

“This time, we will be needing the details. Because if you notice it, we just state the landed cost, while the cost of doing business depends on the operations of each company, so they are the ones in the position to give out the details,” Romero said.