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

Volume 2, Number 34              September 29 - October 5,  2002            Quezon City, Philippines

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New OPH in October: Oil Price Hocus-Pocus  

An independent computation of oil-related data shows cumulative losses of oil companies in 2001 and the first nine months of 2002 amounting to P2.34 ($0.0446) per liter. However, there is evidence to prove overpricing in 2000 amounting to P2.64 ($0.0504) per liter. There is factual basis therefore in calling for a rollback in oil prices amounting to P0.30 ($0.0057) per liter. 


The public’s mind is already being conditioned to an impending oil price hike anytime in October by as much as 53 centavos per liter ($0.0101, based on an exchange rate of P52.40 per US dollar). An independent computation based on the given data, however, shows that there is factual basis to call for a rollback amounting to 30 centavos ($0.0057) per liter. 

Industrialist Raul Concepcion, who also chairs the Consumer and Oil Price Watch, claims that the increase is “due to the increasing tension in the Middle East brought about by Iraq’s decision to reject any new United Nations resolutions on weapons inspections.” 

According to data from the Department of Energy (DoE), Dubai crude prices are pegged at $26.61 per barrel this month compared to $25.24 in August. The foreign exchange rate, on the other hand, stands at P52.07 per U.S. dollar in September compared to P51.82 last month. 

An independent monitoring of price movement of petroleum products since January 2000 shows that on the average, oil prices increased by P4.01 ($0.0765) per liter.  

Indeed, the P1.46-rollback ($0.0279) per liter in oil prices in 2001 is substantially negated by the increases in 2000 and the first nine months of 2002 amounting to P3.87 ($0.0738) per liter and P1.60 ($0.0305) per liter, respectively. (See Table

Oil companies claim that these price movements are mainly based on fluctuations in world crude prices and the peso-dollar exchange rate.  

According to DoE data, Dubai crude prices in 2000 were pegged at $26.14 per barrel. By 2001, Dubai crude prices fell to $22.81 per barrel, and then slightly increased to $23.30 per barrel for the first nine months of 2002. 

The peso-dollar exchange rate, on the other hand, stood at P44.71 in 2000, and was devalued to P51 and P51.06 in 2001 and January to September 2002, respectively. 

Based on the data on Dubai crude prices and peso-dollar exchange rate, oil companies overpriced their products by P2.64 ($0.0504) per liter in 2000 based on the industry rule of thumb. 

For the year 2000, the DoE-computed rule of thumb states that there should be a P0.35 centavos per liter oil price hike (or rollback) for every $1 increase (or decrease) in Dubai crude prices. A one-peso fluctuation in the peso per U.S. dollar exchange rate, on the other hand, results in a 20-centavo rollback (in the event of peso appreciation) or increase (in the event of peso depreciation). For the years 2001 and 2002, Bulatlat.com computes the rule of thumb at 42 centavos for every $1 increase or decrease in Dubai crude prices, and 19 centavos for every P1 appreciation or depreciation of the exchange rate. 

The overpricing of petroleum products two years ago negates the underrecoveries or losses of oil companies as a result of fluctuations in Dubai crude prices and the exchange rate. Data show that these losses only amount to P0.19 ($0.0036) per liter in 2001 and P2.15 ($0.0410) for the first nine months of 2002. (See Table

This means that the cumulative losses since 2001 amounting to P2.34 ($0.0446) per liter should be analyzed in the context of the P2.64-overpricing ($0.0504) per liter in 2000. Such is the factual basis in calling for a rollback in oil prices amounting to P0.30 ($0.0057) per liter. Bulatlat.com

Actual Price Movement
of Petroleum Products and Estimated Profiteering of Oil Companies

(in peso per liter)


Actual Price


January to December 2000



January to December 2001



January to September 2002






























TOTAL (2000 to 2002)



Bulatlat.com computations based on DOE and BSP data


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