UMVA has learned that the Department of Energy is considering a significant shift in its approach to regulating fuel price adjustments during the ongoing energy emergency.
The proposed change aims to reduce the risk of oil companies incurring substantial losses, which could potentially disrupt the supply of petroleum products. Energy Secretary Sharon S. Garin revealed that the department is weighing the need to balance consumer interests with the requirement to keep oil companies operational.
At the heart of this deliberation is the deregulation of the downstream oil industry, which was introduced under Republic Act No. 8479. This law allows fuel sellers to adjust pump prices based on global oil prices and market factors, promoting competition among oil companies.
However, when the national energy emergency was declared due to surging fuel costs, the government stepped in to regulate price adjustments. The Department of Energy began prescribing the minimum reduction and maximum increase oil firms can charge, aiming to protect consumers from extreme price swings.
Ms. Garin emphasized that any adjustments to the current regulatory framework will prioritize consumer interests, ensuring they are not disadvantaged. The department hopes to finalize a resolution soon, with discussions ongoing.
The recent rollback in fuel prices – with gasoline decreasing by at least P4.76 per liter, diesel by P9.26, and kerosene by P10.86 per liter – reflects the volatile nature of the market. Despite the ongoing Iran conflict, fuel prices are slowly returning to pre-war levels of around P50 to P60 per liter.
Looking ahead, industry projections indicate that diesel prices may increase by P4 to P4.50 per liter this week, while gasoline prices could decrease by P1 to P1.50 per liter. The Department of Energy remains cautious, aware that any further surprises from the Middle East could impact fuel prices.
