Oil firms urged to cut diesel prices P1/liter discount for public utility drivers MANILA, Philippines—The Department of Energy is urging local oil companies to provide fuel discounts to public utility drivers to help cushion the impact of increasing oil prices on transport fares. Energy Undersecretary Jose Layug Jr. confirmed Wednesday that the DOE was in talks with Petron Corp. and Pilipinas Shell Petroleum Corp. on a possible discount of as much as P1 a liter for diesel. “We are already finalizing this. We expect that by next week, we could already start implementing the discounts,” Layug explained. However, he did not indicate the duration of the discounts as the parties were still threshing out the details of the program. A special lane would again be opened to public utility drivers specifically for this program, he added. Petron chairman Ramon S. Ang confirmed in a text message that the country’s biggest oil refiner and retailer would support the government discount program, but did not indicate the amount it was willing to provide. Pilipinas Shell confirmed that its Pepeng Pasada discount for jeepney drivers would be increased to P1 from the current 50 centavos per liter in selected stations. Prices of local petroleum products have been on an uptrend, with local firms implementing oil price increases five times since the middle of December last year. As of January 25, the price of diesel has risen to P41.60 a liter, regular gasoline to P49.64 a liter, and E10 gasoline to P53.52 a liter, according to the latest DOE oil monitor report. The same report showed that the price of Dubai crude rose $0.35 a barrel during the January 17-21 period compared with the previous week’s level. Prices of gasoline, diesel and kerosene, based on the Mean of Platts Singapore benchmark, similarly rose by $1.30 a barrel, $2.05 a barrel and $2 a barrel, respectively, during the same period compared with its averages in the previous week. According to the report, the fresh round of increases could be attributed to the demand forecasts released by the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). “OPEC said it now expects world oil demand growth of 1.2 million barrels a day, or 1.4 percent, to 87.32 million barrels a day for 2011, referring to the magnitude and speed of the world economic recovery. On the other hand, the Paris-based IEA predicted oil demand this year to rise to 89.1 million barrels a day, up from 87.7 million barrels a day in 2010. Last month, IEA forecast oil demand to hit 88.8 million barrels a day,” the DOE report stated. “While world oil prices have also been driven by high oil demand in China, the move of the government of China to combat inflation is somehow keeping oil prices in check,” it added. The bourse yesterday formally launched its renamed PSEtrade system -- operational since July last year -- and its top official said that next in line would be linking up with five Association of Southeast Asian Nations (ASEAN) counterparts. "In the plan, by the end of the year you will have a system up and running with at least three participants. Others will come in 2013 and 2014," PSE President and Chief Executive Hans B. Sicat said in a briefing. The initial phase of the ASEAN electronic trading link will involve Singapore, Malaysia and Thailand, Mr. Sicat said, adding: "We look forward to [joining] early next year then Vietnam and Indonesia [will follow]." Representatives of the six exchanges finished a three-day meeting last Tuesday, he said. In February 2009, the PSE, Singapore Exchange, Bursa Malaysia, Stock Exchange of Thailand and the Indonesia Stock Exchange said the e-trading link -- which would also include the HoChiMinh Stock Exchange -- could go live in 2010. The six bourses signed an agreement in 2008 and at that time Thai officials said trading could begin as early as 2009. No explanation was given for the delay but the Philippines has said the tie-up would increase liquidity and boost investor participation in the local stock exchange. "There will be the ability where all stocks listed on the PSE will be bought by other people within ASEAN with ease," Mr. Sicat said. PSEtrade is the new name of the Nouveau Systeme de Cotation or NSC that was adopted last July 26. It replaced the Maktrade system that dated back to the unification of the Manila and Makati stock exchanges’ trading operations 15 years ago. "When the ASEAN linkage comes on board, we can say our system will be able to communicate with that ASEAN trading platform, something which would not happen with Maktrade," Mr. Sicat said. In another development, the PSE yesterday also announced that its board had elected former Trade Secretary Jose T. Pardo as independent director effective yesterday. Mr. Pardo was also appointed as chairman of the bourse’s Corporate Governance Committee. "He is a highly respected person in both the private and public sectors whose extensive professional experience will help push the PSE’s initiatives towards corporate governance forward," PSE Chairman Cornelio T. Peralta was quoted as saying in a statement. The PSE has 253 listed firms and 133 active trading participants. |
U.S. Stocks Rise as Dow Tops 12,000 on Fed Statement, Home Data U.S. stocks rose, sending the Dow Jones Industrial Average above 12,000 for the first time since June 2008, after the Federal Reservemaintained stimulus measures and new-home sales topped projections. Lennar Corp. and Standard Pacific Corp. rallied at least 2.1 percent. Alcoa Inc. and Schlumberger Ltd. advanced more than 2.2 percent as commodities prices climbed. DeVry Inc., the owner of for-profit schools, jumped 13 percent after profit beat analysts’ estimates.Boeing Co. slumped 3.1 percent after forecasting 2011 profit that trailed projections. The S&P 500 gained 0.4 percent to 1,296.63 at 4 p.m. in New York, rallying a fourth straight day. The Dow Jones Industrial Average added 8.25 points, or 0.1 percent, to 11,985.44 and reached 12,020.52 earlier. “I don’t know what more the stock market could have hoped for,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. The Fed continues “to address the two pillars that guide monetary policy: inflation and employment, and they’re both under what the Fed would like to see. The Fed is going to maintain this course until the economy is well in a recovery.” The S&P 500 rallied for a fourth straight day and has climbed 24 percent since Fed Chairman Ben S. Bernanke said on Aug. 27 that he would take action to boost the economy. Among 120 companies in the index that have posted quarterly results since Jan. 10, 88 beat the average analyst earnings estimate, according to data compiled by Bloomberg. Since Jan. 21, SunTrust Banks Inc. and KeyCorp -- lenders based in Atlanta and Cleveland, respectively -- more than doubled forecasts, the biggest positive surprises.
Government securities dropped earlier after sales of new homes rose more than forecast in December and the U.S. sold $35 billion of five-year notes. Ten-year Treasury Inflation- Protected Securities show bondholders expect the consumer price index to increase 2.28 percentage points a year on average over the life of the debt, compared with a 1.7 percent rise forecast for this year by economists surveyed by Bloomberg News. “The $600 billion is going to continue,” said Richard Schlanger, who helps invest $20 billion in fixed-income securities as vice president at Pioneer Investments in Boston. “The focus is on the high unemployment rate, and until that dissipates a little bit, I think it is full speed ahead with their program.” Benchmark 10-year note yields climbed eight basis points, or 0.08 percentage point, to 3.42 percent at 5 p.m. in New York, according to BGCantor Market Data. The price of the 2.625 percent securities due in November 2020 fell 21/32, or $6.56 per $1,000 face amount, to 93 14/32. Thirty-year bonds yielded 4.59 percent, up 10 basis points. They increased as much as 12 basis points, the most on an intraday basis since Jan. 5. |
Oil Rises on U.S. New Home Sales Gain, Federal Reserve Outlook Crude oil climbed as new-home sales in the U.S. beat forecasts and Federal Reserve policy makers agreed to keep stimulus measures to bolster the U.S. economy. Futures increased 1.3 percent and equities rose after the Commerce Department said purchases of new homes surged 18 percent in December. The Fed reiterated today that $600 billion in debt purchases in its quantitative-easing program are needed through June. Oil dipped briefly after the Energy Department reported a larger-than-forecast gain in supplies. “A bit of economic bullishness can make a big difference in the market,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There was nothing bullish in today’s inventory report.” Crude oil for March delivery rose $1.14 to settle at $87.33 a barrel on the New York Mercantile Exchange. It was the biggest increase since Jan. 11. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
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Rhys Cruz
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