RP tries to deal with oil price hike

RP tries to deal with oil price hike

MANILA: President Gloria Arroyo has ordered a "contingency plan" drawn up to explore the Philippine government's options should there be further rises in oil prices, which have spurred street protests and boosted inflation, her spokesman said on Wednesday.

"This contingency plan ... is calibrated to deal with the risks depending on the level of oil prices," said presidential spokesman Ignacio Bunye.

Energy Secretary Raphael Lotilla will submit the plan to Arroyo "in the next few days," Bunye said.

The government lost its power to dictate pump prices after Congress passed a law deregulating the oil sector in the 1990s.

Arroyo had told the energy secretary that the most important thing was to look into whether the three main oil companies in the country were acting as a cartel in setting fuel retail prices, Bunye said.

On Monday, a massive transport strike, called to protest the almost weekly increases in oil prices, stranded tens of thousands of commuters in major Philippine cities.

There are concerns that oil price increases may cause the inflation rate to exceed government projections, straining the resources of an administration that is already struggling to keep the budget deficit under control. -- AFP