Palace sets mid-Feb. deadline to solve lack of LPG supply

MANILA, Philippines - Malacañang on Wednesday gave the Department of Energy (DoE) until mid-February to resolve an alleged shortage in cooking gas supply. Executive Secretary Eduardo R. Ermita said he was informed by the Energy department that there is no liquefied petroleum gas (LPG) shortage but cited the need to set a "time line so appropriate steps would be taken." "Give us another two weeks. If the problem is not abated, we will call the DoE to task," he told reporters. The Palace official, however, declined to say if heads will roll should the issue remain unresolved. On the issue of overpricing, Mr. Ermita explained that the industry is deregulated and prices are controlled by market forces. The DoE on Tuesday said it would monitor movements of LPG refillers as part of investigations on what caused the supply crunch in recent weeks. These refillers were said to be hoarding LPG supplies. The department also said it expects the LPG supply to normalize soon. The Liquefied Petroleum Gas Marketing Association (LPGMA), for its part, said LPG prices could go up by P5 per kilogram amid tight supply. Arnel Ty, LPGMA president, said more than 30% of small LPG retailers have been severely affected by the shortage. He said 15 metric tons of LPG delivered to Pilipinas Shell Petroleum Corp. and Petron Corp. on Sunday lasted only for four days. Mr. Ty said the supply shortage could last until March after major LPG suppliers failed to place advance orders from international suppliers. He also said the shortage had led some suppliers to sell LPG for more than P500 per 11-kilogram cylinder tank. Price adjustments Meanwhile, small oil firm Flying V adjusted pump prices Wednesday to follow earlier rate movements by most oil firms. In a text message, Flying V said that it cut diesel prices by 75 centavos per liter and kerosene at a peso per liter. It, however, raised gasoline prices by a peso per liter. Last month, Flying V said it will not adjust prices this month since its fuel prices are still cheaper by 50 centavos. "Actually we already got behind so the adjustments we made were [to match the price of competitors]," said Jose Victor L. Cruz, Flying V vice-president for retail network operations. The benchmark Dubai crude average as of Jan. 26 jumped to $44 per barrel from last month’s average of $41. Imported gasoline rose by $10 to $51 per barrel from last month’s average price, while imported diesel’s average price remained at $61. Pump prices, which peaked at P60 last July, now range at P30-P35 per liter for gasoline and P23-P30 per liter for diesel. — BusinessWorld