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December 12, 2014

LPG-MA calls for ‘downward correction’ in prices of basic goods

News Release

Office of LPG-MA Rep. Arnel Ty, House Deputy Minority Leader

Room 607 South Wing, House of Representatives, Constitution Hills, Quezon City, Tel No. 931-5144

December 11, 2014

UPDATED: LPG-MA calls for ‘downward correction’ in prices of basic goods

Amid plunge in fuel prices

Lower electricity & transportation costs seen in weeks ahead

Falling world crude oil prices projected until 2015

       The LPG Marketers’ Association (LPG-MA) has joined the clamor for an immediate rollback in the prices of basic goods, amid the ongoing slump in fuel prices.

        “We are hopeful that producers of basic necessities and prime commodities will heed the Department of Trade and Industry’s call for lower prices,” said House Deputy Minority Leader and LPG-MA Rep. Arnel Ty.

        “A downward correction in consumer prices is only fair and reasonable, considering that fuel prices have nose-dived,” said Ty, a senior member of the House energy committee.

        Ty cited as an example the drop in the price of diesel -- the fuel most widely used by producers of electricity and the transportation sector.

        Citing Department of Energy (DOE) statistics, Ty said diesel pump prices as of Dec. 4 ranged from P33 to P36 per liter, down 22 percent from P42 to P46 a year ago.

        “The immediate positive impact is substantially lower electricity as well as transportation costs, which in turn should provide manufacturers greater leeway to reduce their selling prices,” Ty said.

        “It is only right that ordinary consumers start to directly benefit from the plunge in fuel prices,” he added. 

       With respect to LPG, Ty said retail prices of the cooking fuel are now around P530 to P570 per 11-kilogram cylinder, down 42 percent from P980.

       Ty also sees world crude oil prices continuing to decline in 2015, owing to a big glut in supply along with sluggish demand.

        “There is a flood of oil, while Europe and China are consuming less fuel due to the slowdown in their manufacturing activities,” he said.

        World crude oil prices are now hovering around $65 per barrel, down some 40 percent since June.

        “In fact, there are forecasts that prices will drop as low as $43 to $48 per barrel by the second or third quarter next year,” Ty said.

        LPG-MA has been batting for stronger government supervision of all energy and consumer markets, so as to safeguard the public against potentially unfair trade practices and pricing abuses.

         Under the law, “basic necessities” include rice, corn, root crops, bread; fresh, dried or canned fish and other marine products; fresh pork, beef and poultry meat; fresh eggs; potable water in bottles and containers; fresh and processed milk; fresh vegetables and fruits; locally manufactured instant noodles; coffee; sugar; cooking oil; salt; laundry soap and detergents; firewood; charcoal; candles; and drugs classified as essential by the Department of Health (DOH).

         “Prime commodities” include flour; dried, processed or canned pork, beef and poultry meat; dairy products not falling under basic necessities; onions, garlic, vinegar, patis, soy sauce; toilet soap; fertilizer, pesticides and herbicides; poultry, livestock and fishery feeds and veterinary products; paper; school supplies; nipa shingles; sawali; cement; clinker; GI sheets; hollow blocks; plywood; plyboard; construction nails; batteries; electrical supplies; light bulbs; steel wire; and all other drugs not classified as essential drugs by the DOH.

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