|Danny Arao online
Release No. 99-9
to staggered oil price hike
As cause-oriented groups oppose the Visiting Forces Agreement (VFA) and congressional moves to change the Constitution, Pilipinas Shell increased pump prices by three centavos per liter last Friday (May 21). Another round of oil price hike happened two days after (May 23), as prices of petroleum products rose by as much as 57 centavos per liter.
IBON computations show that Pilipinas Shell stands to gain additional earnings of P13.3 million everyday from the 60-centavo per liter oil price hike. Accordingly, this translates to additional earnings of P552,500 per hour.
This computation is based on the projected petroleum consumption of 65 million liters everyday for 1999. Pilipinas Shell currently enjoys a 34% market share, so it is projected to provide 22.1 million liters everyday to Filipino consumers.
In the recent past, IBON maintains that there is no basis for any oil price hike despite the current increase in world crude prices.
Doing so, IBON stresses, would be the height of callousness as oil firms posted net profits amounting to P6.4 billion in 1998, a big turnaround from the previous years reported losses of P4.5 billion.
An oil price hike would also be tantamount to tolerating the overpricing of oil firms in 1998. IBON computations show that for the whole year of 1998, oil companies overpriced their products by P1.7 billion, or roughly P200,000 per hour.
Aside from these, no less than the Department of Energy (DOE) admits that the crude stock of oil firms were bought at prices lower than the current world crude levels. This is a major reason why government has recently asked oil firms to open their books.
With the staggered 60-centavo per liter increase in pump prices, Pilipinas Shell is clearly sizing up the opposition to any oil price hike in a situation where the country is beset with various social problems.
Within a fully deregulated regime, Shell apparently hopes against hope that any opposition will be minimal and will eventually die down.
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