In a letter to Energy Secretary Sharon Garin dated March 11, the Philippine Coastwise Shipping Association Inc. (PCSA) said several members complained that marine fuel is currently being priced higher than prevailing retail pump prices.
“For us, this is highly unusual under established practice in the domestic shipping industry as operators directly procure from depots under wholesale supply arrangements where prices are typically 5 percent to 10 percent lower than pump prices, given the large volumes utilized by all types of ships,” the PCSA said in the letter.
The group asked Garin to look into their complaint to ensure that existing fuel pricing commitments are honored.
The letter was signed by Cesar Licudine, acting PCSA administrator, on behalf of the board of trustees and members of the organization, which is composed of about 50 Filipino shipowner-members operating around 800 vessels on short- and medium-haul routes.
Stable fuel supply
In an interview with reporters, Engineer Jose Rey Maleza, DOE Visayas field head of the Energy Industry Management Division, said Cebu’s fuel supply remains above the government’s required inventory and that additional shipments are expected.
He said a show cause order would be issued to retail outlets found charging more than the estimated price issued by the DOE.
“If the explanation is unjustifiable, there’s a chance we will issue a cease-and-desist order against that particular retail outlet,” he added.
Impact on shipping
The PCSA said in its letter that marine fuel prices rose higher than prevailing retail pump prices after global fuel costs increased due to ongoing tensions in the Gulf region.
“While we are compelled to implement adjustments in our passenger and freight rates, such measures may still be insufficient to fully absorb the impact of the unusually high fuel costs being imposed on our members by oil companies,” the group said.
The PCSA noted that maritime transport is the backbone of the economy, as the Philippines’ archipelagic geography makes shipping the primary means of moving essential commodities and passengers across the islands.
However, the group warned that continued and unchecked increases in fuel prices could force shipping operators to reduce sailings or suspend operations, potentially disrupting the nationwide supply chain.
Surcharge rates
The Maritime Industry Authority (Marina) has allowed shipping companies to increase passenger, vehicle, and cargo rates, provided the increase does not exceed 20 percent of the base fare, to help them cope with rising global fuel prices.
Once fuel prices return to normal levels, shipping firms must reduce their rates and remove the fuel surcharge, Marina said in an advisory issued on March 6.
The agency also allowed shipping operators to reduce or limit trips, consolidating passenger and cargo volumes to maximize ship capacity. However, operators must prioritize the transport of basic and critical commodities.
Any trip cancellations must be approved by Marina and announced through travel advisories to inform the riding public.---Ed: Corrie S. Narisma
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