Pump prices increase P0.30 - P0.35 per liter
March 21, 2002 - Citing the recent uptrend in world oil prices, oil companies raised pump prices by P0.35 per liter for gasoline and P0.30 per liter for diesel and kerosene. Caltex made the first move late Tuesday (19 March), while Pilipinas Shell Petroleum, Petron, Flying V, and TotalFinaElf followed suit on Wednesday (20 March).

This is the first oil price hike for the year, after twelve rounds of price rollbacks in 2001. According to the Department of Energy, the price of Dubai crude oil reached an average of US$22.47 per barrel during the period 1-19 March, an increase from February's US$19.01.

World crude prices are increasing and are expected to continue doing so in light of OPEC's decision to cut oil production by 1.5 million barrels per day. Non-OPEC countries like Russia, Norway, and Mexico are likewise cutting oil production by 500,000 barrels a day. Oil producers are hoping to raise world oil prices to US$22-US$25 per barrel.

Consumer and Oil Price Watch, in its own private monitoring efforts, is protesting the price hike. Citing the fact that oil companies usually keep an inventory of three weeks to one month, the price increase should only come around 21 April, which is the period when the supply bought this month will be sold.

Meralco's 2001 income down 41%
March 20, 2002 - Meralco saw lower earnings for 2001as it reported a net income of P1.4 billion, 41% below that of the previous year. Meralco noted that this was largely due to its higher operating costs and financing charges. In addition, systems losses increased to 10.4% as opposed to 10.18% of the previous year. Operating revenues increased to P129.4 billion, a rise of 25%, due largely to a 24% increase in power costs and a 3.7% increase in volume.

Meralco may impose P1.16/kwh rate hike
March 20, 2002 - Even as Meralco and Napocor are in talks to renegotiate their 10-year supply agreement, Napocor imposed penalties on Meralco. The penalties amounted to P3.3 billion for reportedly reneging on the terms of their current contract. In the past two months, as Meralco tapped natural gas power plants for its power supply, it failed to purchase the required 3,600 megawatts of electricity from Napocor. In January, Meralco purchased only 1,200 of the requisite 3,600 megawatts.

In an investor's briefing held on 19 March, Meralco officials questioned the imposition of these penalties, noting that this would be an "unconscionable additional burden on Meralco consumers," and would likewise affect the company's effort at disciplined spending.

Electric Power IRR Approved
The Implementing Rules and Regulations of RA 9136 (Electric Power Industry Reform Act) was approved by the Joint Congressional Power Commission on 27 February 2002. The law will implement the major structural reforms for the electric power industry and the privatization of the state-owned National Power Corporation. RA 9136 will guide electric power industry participants and government authorities like the Department of Energy (DOE), National Power Corporation (NPC), National Electrification Administration (NEA), Energy Regulatory Commission (ERC), and Power Sector Assets and Liabilities Management (PSALM) Corporation in accelerating the total electrification of the country and in ensuring the quality and affordability of power supply.

View IRR of RA 9136 (Electric Power Industry Reform Act) MS Word 733 KB

Sale of Napocor assets set
March 11, 2002 - The Power Sector Assets and Liabilities Management (PSALM) is set to sell other assets of Napocor, such as its properties and transportation facilities, later this year. An appraisal firm will be hired to assess the value of these assets, according to PSALM President del Fonso. PSALM estimates that around P10 billion will be raised from the sale.

Renegotiation of Meralco-Napocor agreement
March 11, 2002 - Napocor's privatization arm, the Power Sector Assets and Liabilities Management Corp. (PSALM), seems amenable to Meralco's proposal to renegotiate its purchase agreement with the state utility. The new agreement - a transition supply contract - will mean a cut in the Napocor-supplied volume of power to Meralco as the latter shifts to electricity supplied from the newly-opened Sta. Rita and San Lorenzo natural gas-fired facilities in Batangas. While the cancellation may mean further losses for debt-ridden Napocor, consumers are seen to benefit because of the lower power rates of the natural gas plants.

With the Malampaya deep-water gas-to-power project of Shell Philippines Exploration starting operations in October 2001, the Philippines became one of the major natural gas producers in the region. The 500-mw San Lorenzo plant and the 1,000-mw Sta. Rita plant have both tapped this resource for power generation.

Napocor debt reaches P310 billion
March 8, 2002 - Financial obligations of the National Power Corporation (Napocor) reached P310 billion in 2001, an increase of 6.2% from 2000's P292 billion. This was reported by the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency created by the Power Reform Law to take over Napocor's debts and the sale of its disposable assets. PSALM President Edgardo del Fonso said that 57% of this amount is owed to the ADB, World Bank, and the Japan Bank for International Cooperation.

The Bureau of Treasury also estimates Napocor's funding needs for 2002 at US$1.5 billion, up from the initial estimate of US$1 billion. The government has reportedly secured US$750 million for Napocor.

Water regulatory body proposed
March 5, 2002 - A new water regulating body is planned as part of the government's efforts to better manage the country's water resources. Aimed at fostering the efficient use of raw water sources as well as maintaining a reasonable tariff structure, the proposed "Water Regulatory Commission" will take over the functions of financial and economic regulation of raw water. The existing National Water Resources Board will focus on resource and technical administration. This is in response to the recognition by NEDA top officials that the present pricing scheme hampers the efficient use of raw water resources. In relation to this, a water summit is slated for 22 March to address issues relating to the management of raw water resources.

Coconut oil for diesel
March 5, 2002 - The Philippine Coconut Authority is urging oil companies to utilize coconut oil in the production of diesel. PCA states that this will not only help decrease manufacturing costs but also improve air emissions by 2%-5%.

The country's annual production of coconut oil is 1.2 million metric tons, of which 80% is slated for the export market. Currently, of the 450,000 metric tons of coconut oil domestically consumed, about two thirds is utilized for making cooking oil. PCA estimates that the coconut industry can provide around 70,000 metric tons for local diesel production. This proposal was presented by PCA as part of its efforts to identify alternative uses for coconut oil in order to reduce dependence on the volatile export market.

Back to current