Arroyo revokes fuel price cap, but seeks oil discounts

(Updated 4:15 PM) - An oil price cap in Luzon will be lifted on Monday although the government has yet to make a definite announcement covering price controls for rice, sugar, and other basic commodities. President Gloria Macapagal Arroyo on Friday revoked Executive Order 839, which pegged fuel prices at October 15 levels, upon the recommendation of a task force that reviewed the controversial controls. The order was issued after oil companies continued to raise product costs even after storms destroyed crops, submerged villages, and left thousands dead. The announcement was made on Friday after she met with Cabinet secretaries and representatives from the business and transport sectors. But before revoking the edict, Arroyo sought petroleum companies’ assurance that they will continue to provide fuel discounts allowing transport groups to keep fares down for six months.
For the latest Philippine news stories and videos, visit GMANews.TV Moreover, the President also requested that price hikes – which will allow firms to recover their losses – should be “staggered … maybe over the Christmas season, for gasoline and diesel." She also proposed that dealers of liquefied petroleum gas (LPG) can stagger their price recoveries over a month and a half. Stakeholders can “work out" the details this weekend so by Monday, “we can synchronize…the general increase," she said, hours before she was scheduled to fly to Singapore for an Asia-Pacific Economic Cooperation (APEC) meeting. In the meantime, Trade Secretary Peter Favila said the government will lift price controls on basic and prime commodities on Monday. However, the move is subject to three conditions, he said. There should be adequate supply and reasonable pricing, no hoarding and profiteering, and discipline in the market. Favila said he “will not hesitate to reimpose price control" in case of widespread violations. Staggered increases Two small oil players – Total Philippines and Eastern Petroleum – were unable to disclose how much they plan to hike prices, saying that they still are waiting for specific guidelines from the government. However, both differed on their willingness to comply with Arroyo’s request to provide fuel price discounts. Marketing director Arturo Cruz of Total assured motorists that staggered price increases and discounts would be implemented in calamity-stricken areas, even though this will greatly affect their profits. “The result is slower recovery of losses but the company is more than willing to abide," Cruz said. He said the company would give discounts of P2 per liter on diesel, P1.50 per liter on kerosene, P1.25 per liter on unleaded and premium gasoline, and P0.85 on ordinary gasoline. But Eastern Petroleum’s Fernando Martinez questioned the immediate provision of discounts, even before oil firms have recovered from losses incurred during the three-week price freeze. “How can we give discounts on something we have not yet earned?" Martinez said. - with a report from Aie Balagtas See, GMANews.TV