Oil companies might maintain current pump prices in the next week
The country's independent oil companies said that they might maintain current pump prices in the next week or so due to the decline in the price of crude in the international market as well as falling demand.
Independent Philippine Petroleum Companies Association (IPPCA) chairman Ferdinand Martinez said fuel prices are expected to hold steady in the next two weeks thereby forestalling any immediate price hike in the local market.
IPPCA is composed of Seaoil Philippines Incorporated, Flying V, Eastern Petroleum Corporation Castrol, Filpride, Liquigaz, Chemrez, Oilink, Filoil, Chemfour, IEPI and Unioil Petroleum Philippines Inc.
But Martinez clarified that despite the substantial reduction in crude prices, a rollback is not in the offing because the average oil prices this week is still higher by about $3 to $4 a barrel.
This, he said translate to a P2 “under-recoveries” per liter in the local market.
But he said that they are waiting for the end of the month figures before deciding whether to roll back their pump prices.
“We will know in the middle of next month if we could do that,” he said referring to a rollback.
Earlier, Department of Energy (DOE) Secretary Angelo Reyes said the same thing saying that despite the $17 per barrel rollback in the international market, they are not expecting local companies to immediately follow lead and reduce their pump prices.
Reyes said local companies compute their “under-recoveries” on a monthly basis adding that a rollback in the international market would be likely felt by next month especially if the trend continues.
“We cannot used that rollback as a basis to say that local pump prices will follow suit,” Reyes said.
In a related development, the IPPCA official said they are supportive of the move in the Lower House to revert to the specific tax system rather that the Expanded Value Added Tax (EVAT) for oil and oil products.
He said the move would simplify the tax collection system of the Department of Finance (DOF).
Another advantage, Martinez said if the proposal raised by Antique Rep. Exequiel Javier regarding the specific tax system is that it can help eliminate the undue price advantage of oil refiners Shell Philippines and Petron Corporation over small finished product importer.
Javier pointed out that the specific tax system will not reduce the government's revenue collection even though under his proposal, prices of diesel will be reduce by as much as P3 per liter over a six month period.
IPPCA has echoed the lawmaker's stand and said the DOF is already enjoying a huge windfall from EVAT collection amounting to P16 billion for the government's revenues to be affected.