The Philippine Online Chronicles

Malacanang will lift the price cap on petroleum products starting Monday, November 16, inquirer.net reported.

President Gloria Macapagal Arroyo said “there should be no drastic increases in fuel prices with the removal of the cap.”

She also requested that price hikes – which will allow firms to recover their losses – should be “staggered…maybe over the Christmas season, for gasoline and diesel." She proposed that dealers of liquefied petroleum gas (LPG) can stagger their price recoveries over a month and a half, Yahoo News reported.

But oil executives said the public must brace for big time price hikes in pump fuel and liquefied petroleum gas (LPG), mb.com.ph reported. At least three oil companies - small players Eastern Petroleum, Flying V Philippines and Seaoil Philippines - have bared intentions of immediately hiking product prices once Executive Order (EO) 839 is revoked by President Arroyo.

Executive Secretary Eduardo Ermita admitted that the lifting of the price cap that froze oil prices to October 15 levels in typhoon affected areas is a win-win solution for oil companies and consumers.

The Department of Justice and Department of Energy Task Force recommended the lifting of Executive Order 839 on condition that “oil companies agree to implement discounts and stagger future price increases.”

According to bworldonline.com, Justice Secretary Agnes Devanadera who heads the taskforce said, “to address concerns in still-recovering areas, the DOE-DOJ taskforce “backed an oil industry proposal for a "package of discounts."

Oil companies previously warned of oil supply shortage to convince Malacanang to lift the oil price freeze..

The decision to lift the oil price cap was met with opposition by consumer and transport groups.

Bayan Muna party-list member Teodoro Casiño said the repeal of EO 839 was “a step back for the people and reveals that the President is just after brownie points to compensate for her government’s failure over ‘Ondoy’ and ‘Pepeng.”

Price controls on prime and basic commodities would also end on Monday.