Adoption of Automatic Pricing Mechanism (APM)
- ERB Decision in Case No. 98-12 approved the APM formula for determining wholesale posted prices.
- APM formula bases prices on Dubai crude landed cost.
Price Reduction Due to Lower Dubai Crude Costs
- February 1998 average FOB cost for Dubai crude was US$12.62/barrel, lower by US$1.22 compared to January 1998.
- Exchange rate differences between January (P42.6610 per US$1) and February (P40.4143 per US$1) 1998 contributed to cost reduction.
- Overall reduction in petroleum product cost amounted to P0.5663 per liter.
Oil Price Stabilization Fund (OPSF) Adjustments
- Need to zero-out current claims or contributions to the OPSF.
- Removal of OPSF cross product subsidy affects price reduction.
Price Adjustments Per Product (Peso per Liter)
- Premium-Lowlead: Total reduction P1.2910 (Crude change -0.6977; OPSF removal -0.5933)
- Premium Unleaded: Total reduction P0.9985
- Regular: Total reduction P1.0147
- Avturbo: Total reduction P1.6983
- Kerosene: Total reduction P0.1926
- Diesel Oil: Total reduction P0.2302
- Fuel Oil/Feedstock: Total reduction P0.3794
- LPG: Total reduction P1.5002
- Average total reduction: P0.5663
Rationalization of Transshipment Rates
- Adjustment needed to reflect pre-unconstitutionality transshipment rates charged before Supreme Court decision on RA No. 8180.
Mandatory Price Compliance for Petroleum Entities
- Oil companies and gasoline station operators/dealers must comply with new price list attached to the resolution.
- Posted Price Differentials (PPD) and Company Transshipment Differentials (CTD) for depot investments and operations accrue to oil companies.
- Rounding-off Differentiate (RD) also accrues to oil companies temporarily.
Reporting Requirements
- Oil companies required to submit monthly reports, by depot, on PPDs and CTDs within 20 days after the month ends.
Wharfage and Hauling Fees
- Wharfage fees to be borne solely by oil companies; no charging to resellers or dealers.
- Sea haulers authorized the same water hauling rate as overland haulers in Metro Manila (P0.1140 per liter).
- Maximum pumping charge for fuel oil deliveries set at P0.02 per liter, accruing to overland haulers.
Kerosene Retail Pricing
- Retail prices include categories: pump prices, ambulant resellers, and sari-sari stores.
- Ambulent resellers charged pump price plus handling fee (P0.10/liter Metro Manila; P0.15/liter outside Metro Manila).
- Sari-sari stores charged pump price plus handling fee (P0.25/liter Metro Manila; P0.30/liter outside Metro Manila).
Pricing of Special Fuel Oil Blends
- Wholesale prices correspond to combined prices of blended fuel oil and diesel components.
- Additional premium may be added for higher quality specifications required by consumers.
Effective Date and Dissemination
- Prices and related provisions take effect on March 13, 1998.
- Copies of the resolution to be provided to oil companies, Federation of Petroleum Dealers, dealers’ associations, and Haulers Association.
- These entities directed to disseminate resolution contents within their areas of operation.