P65/liter gasoline price looms

MANILA, Philippines—Consumers will have to deal with weekly fuel price increases of P1.50 a liter that started on Saturday, as oil firms scramble to recover losses resulting from skyrocketing crude prices in the world market.

Allowing the oil firms to recoup their losses could drive the price of gasoline to a record P65 a liter.

An industry executive said fuel prices could go up by between P8 and P11 a liter to reflect the higher oil prices.

"Under-recoveries [the amount that oil firms need to recoup] have soared ... There's really no relief in sight. Consumers will have to bear weekly increases, most likely by P1.50 a liter," the executive said.

Virginia Ruivivar, public affairs manager at oil refiner Petron Corp., said that for diesel alone, the current pump price was P8 a liter lower than the actual imported price of the product.

The hefty fuel price increases are expected to further jack up the prices of almost everything else, making life more difficult for most Filipinos.

Consumer groups Monday called for the removal of the 12-percent value-added tax (VAT) on oil products to cushion the impact of high fuel prices.

The militant Bagong Alyansang Makabayan (Bayan) said it was not right that the government was enjoying a windfall from VAT collections when consumers "have their backs against the wall in the face of rising inflation."

But the Federation of Philippine Industries said subsidies and socialized pricing schemes were the best way to address the rise in fuel prices.

Over the weekend, the latest price increase of P1.50 a liter brought the price of premium unleaded gasoline to between P50.67 and P55.15 a liter, diesel to between P42.91 and P48, and kerosene to between P48.30 and P53.50.

Since the start of the year, gasoline, diesel and kerosene prices have risen 12 times for a total of P9.50 a liter for gasoline, and P10 a liter for diesel and kerosene.