What came as a surprise is the R0.40 per kilogram increase in the cost of Liquefied Petroleum Gas (LPG) as first announced by giant player Pilipinas Shell Petroleum Corporation as this came in the wake of the Department of Energy’s (DoE) forecast that LPG prices will go down due to the downtrend in international contract prices.

The first to announce a price increase was new player Eastern Petroleum Corporation which posted an upward adjustment in its gasoline prices by R0.40 liter effective today at 5 a.m. while implementing a tempered price increase of R0.30 per liter for diesel and kerosene.

These was immediately followed by Pilipinas Shell which matched the increase implemented by its upstart counterpart.

Eastern Petroleum General Manager May Gendrano Sorra stressed that this new round of price increase is in view of the climb in the spot prices of international petroleum products based on the Mean of Platts Singapore (MOPS) in January as compared to December 2004 prices.

"Eastern Petroleum has advised its dealers that they can start recovering R0.30 for diesel and kerosene and R0.40 for all gasoline products starting 5 a.m. Sunday in view of MOPS increase for January versus December average," the company official said in her advisory to media.

She further noted that while the actual increase in the world market is $1.22 per barrel for diesel and $2.51 for gasoline, it will only recover R0.30 and R0.40 per product to cushion price impacts on consumers.

Meanwhile, Shell General Manager for External Affairs Roberto S. Kanapi noted that this round of increase prompted his company to undertake "more frequent review of product prices to reflect market conditions."

Both companies, however, assured that the existing R1 discount for jeepneys and buses in their selected stations nationwide will continue to be enforced.

It would be noted that on January 6 this year, domestic oil companies have cut their gasoline prices by R1 per liter as December prices were relatively lower than November average.