Gov't expects stable fuel prices or even a rollback
Business World, January 6, 2005
The Department of Energy (DoE) yesterday gave assurances that local fuel prices will not increase despite the implementation of a 5% import duty on crude and all finished products beginning this month.
An oil price rollback may even be possible in the coming weeks, Energy Sec. Vincent S. Perez, Jr. said.
"World prices have gone down and if they remain stable, we can expect a rollback in the coming weeks especially in gasoline. The good news is prices will not rise because of the import tariff. There's no pass on, there's no effect at the moment," he told reporters.
Citing DoE computations, Mr. Perez said the additional tariff, which is equivalent to an average 36 to 38 centavos per liter, will hardly be felt by consumers given the softening of world oil prices.
"I hope local oil companies will be sensitive to our people's aspiration to enjoy some relief from last year's battering. I am urging them not to foot-drag in reflecting the global price trend in the local pump price," he said.
DoE data showed that the average price of Dubai crude fell to $34.20 per barrel in December from $34.87 in November. Regional prices for unleaded gasoline also dropped to $44.81 from $52.45, while imported diesel also fell to $51.33 from $56.82.
Imported crude and all refined petroleum products except the socially-sensitive liquefied petroleum gas (LPG) are now levied a 5% import duty from 3% previously. Mr. Perez said the government expects to raise additional revenues of about P5.5 billion annually from the additional tariff.
Meanwhile, the Energy chief said oil prices are likely to remain at current levels over the next three months.
"Existing oil inventories built up in major international oil markets will likely keep prices at present levels in the first few months of the year although the so-called 'oil premium' brought about by the attacks on major oil infrastructures in the Middle East as well as geopolitical tensions involving oil producing countries will continue to take effect," he said.
Citing energy analysts' forecasts worldwide, the DoE said international oil prices are likely to remain above $30 per barrel for Dubai crude, Asia's benchmark, in the first five months of 2005.
New York based-PIRA Energy Group said Dubai crude in January will average up to $36 per barrel to $33 in May.
Commercial crude inventories in major oil markets are at multi-year highs, at about 27 million barrels beginning the fourth quarter last year, the DoE said.
It added that according to PIRA Energy, crude stock buildup stands at 49 million barrels, the largest since 1997.
Combined with a reported slowdown in economic growth in countries such as China and Japan, analysts said the sharp increase in prices seen in 2004 is unlikely to take place, the Energy department said.
Last year, world oil prices reached all-time highs, mainly due to very low oil inventories coupled with a surge in oil consumption in developing Asia, instability in Iraq and in other oil producing countries, bankruptcy problems in Russian oil firm Yukos and the occurrence of natural calamities like hurricane Ivan in the Gulf of Mexico.
Dubai crude soared by 25% to an average $33.63 per barrel last year from $26.79 in 2003, hitting a record high of $41.26 in August 20 last year.
However, the DoE quoted PIRA Energy as stating that the downward pressure on crude prices will be limited due to continuing threats of terrorism against oil installations, uncertainty on the sustainability of Yukos exports, and the prevailing high demand of middle distillates (kerosene, aviation turbo, gas oil and diesel) in Europe and the United States. -- Bernardette S. Sto. Domingo
The Department of Energy (DoE) yesterday gave assurances that local fuel prices will not increase despite the implementation of a 5% import duty on crude and all finished products beginning this month.
An oil price rollback may even be possible in the coming weeks, Energy Sec. Vincent S. Perez, Jr. said.
"World prices have gone down and if they remain stable, we can expect a rollback in the coming weeks especially in gasoline. The good news is prices will not rise because of the import tariff. There's no pass on, there's no effect at the moment," he told reporters.
Citing DoE computations, Mr. Perez said the additional tariff, which is equivalent to an average 36 to 38 centavos per liter, will hardly be felt by consumers given the softening of world oil prices.
"I hope local oil companies will be sensitive to our people's aspiration to enjoy some relief from last year's battering. I am urging them not to foot-drag in reflecting the global price trend in the local pump price," he said.
DoE data showed that the average price of Dubai crude fell to $34.20 per barrel in December from $34.87 in November. Regional prices for unleaded gasoline also dropped to $44.81 from $52.45, while imported diesel also fell to $51.33 from $56.82.
Imported crude and all refined petroleum products except the socially-sensitive liquefied petroleum gas (LPG) are now levied a 5% import duty from 3% previously. Mr. Perez said the government expects to raise additional revenues of about P5.5 billion annually from the additional tariff.
Meanwhile, the Energy chief said oil prices are likely to remain at current levels over the next three months.
"Existing oil inventories built up in major international oil markets will likely keep prices at present levels in the first few months of the year although the so-called 'oil premium' brought about by the attacks on major oil infrastructures in the Middle East as well as geopolitical tensions involving oil producing countries will continue to take effect," he said.
Citing energy analysts' forecasts worldwide, the DoE said international oil prices are likely to remain above $30 per barrel for Dubai crude, Asia's benchmark, in the first five months of 2005.
New York based-PIRA Energy Group said Dubai crude in January will average up to $36 per barrel to $33 in May.
Commercial crude inventories in major oil markets are at multi-year highs, at about 27 million barrels beginning the fourth quarter last year, the DoE said.
It added that according to PIRA Energy, crude stock buildup stands at 49 million barrels, the largest since 1997.
Combined with a reported slowdown in economic growth in countries such as China and Japan, analysts said the sharp increase in prices seen in 2004 is unlikely to take place, the Energy department said.
Last year, world oil prices reached all-time highs, mainly due to very low oil inventories coupled with a surge in oil consumption in developing Asia, instability in Iraq and in other oil producing countries, bankruptcy problems in Russian oil firm Yukos and the occurrence of natural calamities like hurricane Ivan in the Gulf of Mexico.
Dubai crude soared by 25% to an average $33.63 per barrel last year from $26.79 in 2003, hitting a record high of $41.26 in August 20 last year.
However, the DoE quoted PIRA Energy as stating that the downward pressure on crude prices will be limited due to continuing threats of terrorism against oil installations, uncertainty on the sustainability of Yukos exports, and the prevailing high demand of middle distillates (kerosene, aviation turbo, gas oil and diesel) in Europe and the United States. -- Bernardette S. Sto. Domingo
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