Oil price drop seen to bring down prices of goods

ABS-CBN News

Posted at Dec 02 2014 01:55 PM | Updated as of Dec 02 2014 09:55 PM

MANILA – Prices of basic and prime goods are expected to go down due to a drop in world oil products.

The Department of Trade and Industry (DTI) is now calling on producers to adjust prices commensurate to the decrease in transportation costs.

“We are calling on producers and distributors to share the savings they are making on the cost of transportation and energy with consumers, particularly on agricultural products and basic consumer goods,” Trade Secretary Gregory Domingo said.

“This would be a timely and much needed service to Filipino consumers especially with Christmas just around the corner,” he added.

Domingo has instructed DTI’s Consumer Protection Group (CPG) to compute deductions from the suggested retail price (SRP) of basic necessities and prime commodities that include agricultural and non-agricultural products because of lower transport and energy costs.

“We are going over our data to check how the price drop should be reflected on the prices of basic and prime goods. The steady decline of oil prices should now have a significant impact on the prices of all products and services. At the minimum, they should decrease by 3 percent,” he said.

DTI’s Consumer Protection and Advocacy Bureau has already released guidelines for a number of basic products.

DTI said a 155-gram can of sardines should go down by P0.22; a 370-milliliter can of evaporated milk by P0.95; a 50-gram coffee refill by P0.99; and a 25-kilogram sack of flour by P25.91.

“Filipino consumers should also benefit from the continuous fall in world oil prices that have gone down some 30 percent since June this year,” said Domingo.

The Organization of Petroleum Exporting Countries (OPEC) recently decided not to cut output at its 166th meeting in Vienna, Austria and maintain production at 30 million barrels per day as first agreed in December 2011.

The price of the benchmark Brent crude then fell below $72 a barrel, its lowest since August 2010, before settling at $72.82, a 5 percent drop on the day.

The DTI said that with this development, oil prices can be expected to remain low in the coming months.

Based on data from the Department of Energy (DOE), the average pump price of diesel fell about 20 percent this year, from P44.63 per liter in January to P36.71 this November.

DOE records also show that the average household LPG price declined by about 25 percent to P34.54 per kilogram from P45.36 over the same period.