Amid price hikes, Aquino open to amending Oil Deregulation Law

ABS-CBN News

Posted at Jan 26 2011 04:06 PM | Updated as of Jan 27 2011 12:17 AM

MANILA, Philippines - President Aquino is open to amending the Oil Deregulation Law amid the almost weekly price increases by most oil companies.

“I think it was in my first term [that] I first mention that I really was wondering, how come they all increase their prices to the same level and roughly at the same time?" he told reporters on Jan. 26.

"There should have been different efficiencies that would have produced the price factors. So that is, I guess, an aspect that I want to really study further,” Aquino said after attending the Tenth Biennial Conference of the International Council of Universities of St. Thomas Aquinas (ICUSTA) at the University of Santo Tomas campus.

He also said he is open to a suggestion for the Palace to sit down with private oil firms for a possible 30-day 'waiting period' before implementing a price hike.

"That seems to be a good suggestion. We will have to consult the oil companies. As you know, [the] price of oil in the world market -- by information -- keeps on increasing. So perhaps that can be a formula that can meet their needs and also meet our desire to keep the prices more reasonable," President Aquino told reporters

In a statement on Jan. 25, Sen. Ralph Recto said the 30-day 'waiting period' "would give motorists and other oil-dependent sectors some breathing space before another price shock hits them."

“The weekly price increases are now taxing the patience and wallets of the public. The government could temper the accumulating national outrage by appealing to oil companies to do their increases every 30 days,” wrote the Senate ways and means chair and energy panel senior member.

The senator also noted that the waiting period coincides with the first-in-first-out policy in accounting for oil inventory. This means that oil stocks bought at lower prices or before any upward global price movement should be the first stocks to be sold to the public.

Analysts have warned that continuous oil price hikes will soon impact cost of goods and services in the country.

The oil price hikes hit consumers after the Aquino administration gave its nod to other transportation-related increases, such as toll rates and train fares.

The government targets an inflation rate within the 3% and 5% range in 2011. - with report from Willard Cheng, ABS-CBN News