With the minimum fare hike of P1.50 today, oil majors Petron Corp., Pilipinas Shell Petroleum Corp. and Caltex Philippines Inc. will no longer offer a P1 to P2 per liter discount on their diesel products.
This is despite Department of Energy’s appeal to retain the discount stations despite the transport fare increase, which ironically, was approved by the government in reaction to the rising domestic oil prices.
The Land Transportation Franchising and Regulatory Board (LTFRB) approved a P
1.50 increase in fare starting June 12. But the transport groups argued that the fare hike granted by the LTFRB would still not be enough to cover for the high oil pump prices.
Still partly governmentowned Petron has scrapped the discount program for its 75 gasoline stations. It has been offering the discounts since 2003 and was one of the first oil firms to respond to the government’s call on diesel counts in view of rising prices.
At the moment the Department of Energy still intends to talk to oil companies on the possibility of extending the discount program.
Energy Undersecretary JV Emmanuel de Dios is suggesting that the oil retailers lower discount rates instead of totally removing it. "We understand that it is also not proper to always give dole out or subsidy (and) the oil firms also have under recoveries to recoup," however he is still hopeful for a discount extension.
The DoE said is crude world prices are trending down and this could convince oil players to bring back discounts. The Organization of Petroleum Exporting Countries recently decided to increase its production by two million barrels in July and 2.5 million in August.
