Gov’t appeals: Conserve fuel, power

Local prices up anew; record $ 139 in global market; 14th increase announced, with no end in sight


Malacañang appealed to the people yesterday to conserve gasoline and electricity amid another round of oil price increases during the weekend and prospects of more price increases in the coming weeks.

Deputy Presidential Spokeswoman Lorelei Fajardo said the government can do nothing to stop the oil price increases, as the Philippines merely imports oil and is vulnerable to the market forces that drive oil prices up.

“The best thing that we can do is to conserve not only electricity but also gasoline,” Fajardo said in an interview with government network Radyo ng Bayan.

“Kung kinakailangan — at sabi nga, mas healthy — maglakad, mag-bike, mag-carpool tayo. Maraming means na maaari ding gawin ng publiko, hindi lamang ng pamahalaan,” she said.

She said the government can only give out subsidies on fuel for public utility vehicles and for households who consume very little electricity, to mitigate the effects of high oil and food prices on the poor.

Fajardo said the government is taking the lead in conserving energy. President Arroyo had earlier ordered all government offices to turn off their air conditioning units by 4 p.m. every day and to replace their incandescent bulbs with more energy-efficient flourescent lights to conserve electricity.

Fajardo said the government is also drafting a P2 subsidy for public utility vehicles from the P18-billion revenues from the Expanded Value-Added Tax collections of the national government.

Local oil companies

raise prices for 14th

time this year

The local oil companies implemented twin increase in their prices over the weekend, raising gasoline and diesel pump prices by P1.50 per liter and liquefied petroleum dgas (LPG) by P1 per kilogram.

The adjusted prices took effect at 12:01 a.m. and 6 a.m. on Saturday. The price hikes were initiated by small oil player Flying V and immediately followed by all the other companies — Pilipinas Shell Petroleum Corporation, Chevron Philippines which carries the Caltex brand, Unioil, and Petron Corporation.

Further increases in pump prices are expected in the coming weeks as the companies continued to collect on previously computed increases. In the world market, global prices hit a new all-time high record of $ 139 per barrel in last Friday’s trading at the New York Mercantile Exchange – which will be reflected in future local price increases.

The price increases in the Philippine oil market are already the 14th price adjustment this year and there is no end in sight yet.

Unoil said its new round of adjustment was “due to the continued increase in the prices of petroleum products in the world market and to partially recover its losses.”

Rafael Ledesma of Petron’s public affairs office advised media that for its fuels, “we are still reflecting the increase in Dubai crude by more than $ 16 per barrel in May,” which hit an average of $ 119.50 per barrel.

The contract price for LPG climbed substantially this month by $ 55 per metric ton from last month’s $ 852.50 to $ 907.50 per metric ton.

The oil companies are now getting cautious about giving forecasts or estimates on how pump prices would behave in the coming weeks or months, after Energy Secretary Angelo T. Reyes directed to stop doing so.

After shaving off $ 8 per barrel from the price last week, world oil prices rallied anew this week by about $ 16 per barrel because of what market observes as a “buying rush” hinged on the intensifying tension between Israel and Iran that have been fueling speculations of potential supply worries.

Some market analysts are forecasting that oil prices may go to as high as $ 150 per barrel by July 4 because of a projected increase in the demand of the United States for its coming travel holidays.

Market speculations are seen exerting pressure on global oil prices; and these are compounded by worries over the weakening value of the American dollar and the declining oil stockpile of the US.

Rising demand on oil is reportedly triggered by China and other developing economies; and coupled by the influx of oil buyers which are hedging against inflation when the US dollar falls.

Analysts have noted that “supplies have been affected by low capacity expansion and declining yields (in oil-producing countries), while demand has surged largely due to growth in emerging markets.” (Myrna M. Velasco)

Global oil price

hits record $ 139

a barrel on Friday


NEW YORK (Reuters) — Oil jumped nearly 9 percent to a record $ 139 a barrel on Friday, extending a two-day rally to more than $ 16 as the slumping US dollar and mounting tensions between Israel and Iran attracted a stampede of buyers.

Oil prices could top $ 150 by July 4, one of the busiest US travel holidays, as strong demand in Asia triggers a slowdown in shipments of crude to the United States, investment bank Morgan Stanley said.

“We are calling for a short-term spike in oil prices,” the bank said in a research note.

US crude settled up $ 10.75 at $ 138.54 a barrel before touching an all-time high of $ 139.12 in its biggest gain in dollar terms on record, adding to a rise of $ 5.49 on Thursday.

London Brent crude settled $ 10.15 higher at $ 137.69, off the record 8.12 hit earlier.

“It’s eye-popping. It’s absolutely stunning,” said Chris Feltin, analyst at Tristone CapitaL Inc in Calgary.

Oil has risen 44 percent this year, threatening economic growth in major consumer countries including the United States, whose economy already is hobbled by a housing crisis.

Analysts have said the dramatic rally in oil prices is due to rising demand in China and other developing economies as well as an influx of cash from investors seeking a hedge against the weaker dollar and inflation.

The greenback extended weakness against other currencies Friday on data showing the US economy lost jobs for the fifth straight month and the unemployment rate shot up to its highest in more than three years.

The drop in the dollar added to losses from Thursday when European Central Bank President Jean-Claude Trichet said a number of policymakers wanted higher interest rates, possibly as soon as next month. USD/]

“Obviously there’s a lot of concern on the economic impacts of a weakening US dollar. That seems to be driving some of the momentum here today,” said Feltin.

Further support came from remarks by Israel’s transport minister that an attack on Iran’s nuclear sites looked “unavoidable.” It was the most explicit threat yet against Tehran from Prime Minister Ehud Olmert’s government.

Worries of a potential disruption of the OPEC member’s crude supply have helped support prices over the past year.

“We’ve had a huge historic rally on little fundamental input, other than the weakness of the dollar and the news this morning out of Israel that seems to have pushed some geopolitical risk premium back in the market,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Morgan Stanley forecast the diversion of Middle East oil shipments away from the United States to Asian markets could push US crude to $ 150 a barrel by the US July 4th holiday.

“Middle East oil exports are stable, but Asia is taking an unprecedented share,” Morgan Stanley said in a report, adding US inventories have dropped by 35 million barrels since March.

“Robust Asian non-OECD demand growth, coupled with a stagnant global oil supply backdrop, appears to be pricing out Atlantic basin consumers while at the same time driving Atlantic inventories to critically low levels.”

The report added to a string of upward price forecast revisions by analysts, with Goldman Sachs in May predicting prices could tip $ 200 a barrel within the next two years.

A six-year rally in oil has sent prices up six-fold as demand from emerging economies such as China and India strain supplies.

High prices have started to eat away at global growth however, with some consumers such as the United States and the United Kingdom showing signs of lowering consumption.

Some Asian governments — including India — have decided to cut fuel subsidies, stirring concern rising prices could cut further into demand.

The International Energy Agency (IEA), an adviser to 27 industrialized countries, said it may cut its 2008 demand growth projection further after having already more than halved it to 1.03 million barrels per day (bpd).(MB)


My Take:

Funny.  The gvernment who displays unequaled love for corrupt generals and public officials is now calling for us to tighten the belt.

Instead of scrapping the oil dereulation la, instead of looking for cheaper source of oil (such as venezuela), instead of prosecuting the big-time oil smuggler and the cartels, they want us to tighten our belts!

Ni hindi nga nila magawang ibigay ang P125 minimum wage hike across the board eh.  bwisit!

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