Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts

Issue No. 27                        August 19-25,  2001                    Quezon City, Philippines







Join the Bulatlat.com mailing list!

Powered by groups.yahoo.com

Oil Price Rollback of P1.34 per liter still possible --- Bulatlat.com

Bulatlat.com estimates show that there was an overpricing of P2.63 per liter last year, which more than offsets alleged underrecoveries from January to August this year. There is basis therefore for a rollback by as much as P1.34 per liter.

By DANILO ARAΡA ARAO
Bulatlat.com

Notwithstanding last week’s reduction in pump prices, oil companies should roll back prices of petroleum products by P1.34 per liter more.

Bulatlat.com, an independent online media agency, based its computations on the fluctuations in Dubai crude prices and the foreign exchange rate from January 2000 to August 2001.

The two variables directly affect retail prices of petroleum products, based on the industry “rule of thumb” that every dollar fluctuation in world crude prices translates to a 35-centavo adjustment, while every peso fluctuation vis-a-vis the dollar means a 20-centavo decrease (in the case of appreciation) or increase (in the case of depreciation).

Based on the movements in Dubai crude prices and the foreign exchange rate, estimates of Bulatlat.com show that there was an overpricing of about P2.63 per liter in the year 2000, while underrecoveries from January to August 2001 amounted to P1.29 per liter.

This simply means that whatever losses oil companies may be incurring at present are clearly offset by the overpricing that was done last year. Notwithstanding current underrecoveries, therefore, they should rollback prices by as much as P1.34 per liter (i.e., P2.63 minus P1.29).

It may be recalled that oil companies rolled back prices of diesel, regular gasoline and kerosene by 10 to 15 centavos per liter last August 13. The previous rollback was last January which saw a reduction in oil prices by an average of 41 centavos per liter.

However, there were two successive price increases last May and June amounting to 45 centavos and 37 centavos per liter on the average, respectively.

Representatives of oil companies last week have warned that price increases are in the offing in the next months, and this is not just because of alleged underrecoveries. They argued that the winter season in Western countries normally results in increased demand for oil which then translates to increased world crude prices.  Bulatlat.com

Bulatlat.com Estimate of Oil Price Rollback

2000

2001

Possible Rollback

Total Overpricing - 2.63

Total Underpricing: - (1.29)

P1.34 per liter

Jan – 0.09
Feb – (0.28)
Mar – 0.55
Apr – 0.93
May – (1.57)
June – (0.12)
July – 1.07
Aug – (0.38)
Sept – (0.89)
Oct – (0.11)
Nov – 0.38
Dec – 2.97

Jan – (1.01)
Feb – (0.14)
Mar – 0.42
Apr – (0.61)
May – (0.09)
June – 0.14
July – 0.43
Aug a/ – (0.42)

 

N.B. – positive values refer to overpricing while negative ones are  underpricing
a/ based on Aug 1-15 data on Dubai crude prices and foreign exchange rate 

 

 

We want to know what you think of this article.