Fuel price adjustment process set for revamp to cut risk of oil-company losses

THE Department of Energy (DoE) said it is considering stepping back from closely regulating pump-price adjustments during the emergency to reduce the risk of oil companies incurring losses.

Energy Secretary Sharon S. Garin said the department is considering easing its “emergency level of supervision” but will maintain measures to safeguard consumer interests.

“It’s a balancing act. But also, we have to consider that we don’t want these companies to operate at a loss and shut them down because we need their services,” Ms. Garin told reporters last week.

The downstream oil industry was deregulated under Republic Act No. 8479, allowing fuel sellers to set and adjust pump prices based on global oil prices and other market factors, instead of awaiting government approval. The laws aims to promote competition among oil companies and ensure the adequate and continuous supply of petroleum products.

However, the government moved to step in when President Ferdinand R. Marcos, Jr. declared a national energy emergency as fuel costs surged in the wake of the Iran war. At the height of the conflict, diesel fetched as much as P170 per liter.

Following consecutive weeks of major oil-price swings in March, the DoE had started prescribing price adjustments, under which it set the minimum reduction and the maximum increase oil firms can charge.

Ms. Garin said the DoE is still discussing the new scheme and hopes to arrive at a final resolution problem this week.

“Our consumers (should not be) put at a disadvantage. And that’s really the crucial part. We have to make sure that if we make adjustments, we still won’t make it difficult for our consumers,” she said.

Last week, prices were rolled back significantly, with gasoline prices set to decrease by at least P4.76 per liter, diesel by P9.26, and kerosene by P10.86 per liter.

While the Iran war remains unresolved, Ms. Garin said fuel prices are now moving closer to the pre-war levels of around P50 to P60 per liter.

“With no more surprises (from) the Middle East, especially with Iran, Israel, and US, we hope things steady and we go back to the previous prices, or at least not as high (the peak),” she said in a briefing.

For this week, diesel prices are projected to increase by P4 to P4.50 per liter, according to an industry source, citing movements in the Mean of Platts Singapore. Gasoline prices, meanwhile, may decrease by P1 to P1.50 per liter. — Sheldeen Joy Talavera