Energy chief Petilla: Gov't should look into quarterly fare adjustments

The government should look into implementing a quarterly fare adjustments following instability in oil prices, Department of Energy (DOE) secretary Carlos Jericho Petilla said Tuesday.

"My suggestion was make an automatic adjustment, not daily but quarterly if we have to," Petilla told reporters in an ambush interview during the Platts Forum on Oil, Coal, and Biofuels at the Edsa Shangri-La on Tuesday.

"For the formula, that's something the Department of Transportation and Communication will have to look into, not DOE. But we will supply them support," he added.

The suggestion stemmed from a comment that the oil industry is deregulated but fares are regulated.

"There was a comment before that fuel prices are deregulated but current fares are regulated. There were moments oil prices are depressed...and transport groups are actually making money out of it. When oil prices are very high and then fares remain on the same level, that can be detrimental to them," Petilla said.

Early Tuesday, oil companies raised prices of all oil products, citing movements in the world market.

The Energy Secretary said oil prices are driven by market forces and cannot be controlled by the department.

"Our job is not to control prices but to see [that they are] moving together with market forces and it is moving along," Petilla said.

"The Philippines is a price taker [rather] than a price dictator. If prices go up in the States, we go up as well. If it goes down, we go down as well," he added.

Platt global director Jorge Montepeque said oil prices go up because of the instability in the Middle East and in Africa.

"With the political instability in Egypt and in the Middle East, people are becoming more protectionists and global oil prices will be increasing," he said.

Montepeque noted that in 2012, oil prices were close to $110 per barrel barrel but have now gained 5 to 10 percent because of Middle East political instability.

In Egypt, armed forces overthrew elected Islamist President Mohamed Mursi on July 4 and announced a political transition with the support of a wide range of political, religious and youth leaders.

Syria, on the other hand, has been facing political instability since last year due to civil war.

A solution seen by the DOE is that if the Philippines develops its own oil sources and produces its own fuel.

"Unless we produce our own oil, our own fuel, we really have to import. We're about 97 percent importer of oil. Unless we can actually produce, develop more oil fields, we will be dependent on world market prices," Petilla said. — BM, GMA News