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NEWS UPDATES 22 August 2009

Philippines’ oil consumption up on lower prices

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Lower oil prices encouraged consumers to increase spending for fuel products, boosting the Philippines’ consumption for the first five months of the year, local online news website GMANews.TV reported.

Fuel use from January to May reached 290,700 barrels per day, 0.4 percent more than 289,600 barrels consumed daily during the same period last year, Petron Corp. said, citing data from the Department of Energy (DOE).

“Current low prices of fuel encouraged spending on fuel products," said Petron, the Philippines’ largest oil refiner.

The economic slowdown cut demand for the commodity, leading to depressed prices during the last three months of 2008 until the first quarter this year.

During the second quarter, prices of Dubai crude stabilized at $59.30 per barrel, higher than the first quarter’s $44.31 per barrel. This brought the first half average at $ 51.93 per barrel.

Prices of Dubai crude – which is used as the benchmark for local oil costs – averaged at $70 per barrel. But by the first half, fuel costs recovered by as much as 30 percent, Petron said in a statement to the Philippine Stock Exchange (PSE).

“Optimism that the economy has bottomed already with some month-on-month improvements in economic indices supported the rally in oil prices in the second quarter," Petron said.

Even with increased demand, competition remains stiff as new oil companies introduced new and different marketing strategies, Petron said.

As a result, independent oil firms have tightened their grip on the liquefied petroleum gas industry, securing 50 percent market share.

To gain market share, Petron has ventured to build 200 micro-filling stations all over the country.


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