Recto seeks ‘waiting period’ over gas price hikes

01/27/2011 - OIL companies should dispose of their old stocks before raising pump prices, Senator Ralph Recto said Tuesday as he called for a 30-day “waiting period” between price increases.


He said oil companies are required by law to keep a 15-day supply of petroleum products while refineries are supposed to have an inventory good for 30 days.
The senator added these stocks should not be affected when global oil prices rise.


Oil companies, according to him, do not lower pump prices when the global price of oil falls because they claim to have bought the petroleum at a higher price.


Recto said that old stock is sometimes sold at a higher price once global prices rise.


“The first in, first out policy would persuade oil companies to dispose of their old stocks at the same prices that they bought it and not peg it based on current prices.”


He added the weekly price increases "are now taxing the patience and wallets" of consumers.


With a 30-day waiting period between price hikes, the public will have “breathing space before another price shock hits them”.


“Let's say the accumulated oil price hikes after the 30 days hits P3.00 while the accumulated downward prices were computed at P2.00, then the net increase should only be P1.00,” Recto said.


The senator noted that global oil prices might not fall during the waiting period. In that case, the government "could appeal to the corporate conscience of oil companies" to knee prices down.


Early Tuesday, pump prices for gasoline were raised by P0.50 per liter. The price of diesel, meanwhile, went up by P1 per liter. It was the third time prices were raised this year.


It was the third time prices were raised this year, with a total increase of P1.75 per liter of gasoline and P2.25 per liter of diesel.


Gasoline now costs P50 per liter compared to P41 per liter in January 2010. (Sun Star)

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