Higher power rates may reflect on April bills, says Meralco
Manila Electric Co. (Meralco) said the impact of the Middle East war, which has sent global oil prices skyrocketing, might be reflected in its customers’ monthly bills in April.
The distribution giant said households and businesses will not immediately feel the effect of the worsening conflict in the war-torn region this March. This started last Feb. 28 when the United States and Israel launched military strikes against targets in Iran.
“So the earliest that we may see an effect is for April,” said Lawrence Fernandez, vice-president and head of utility economics at Meralco.
However, Fernandez said this would still depend on how long the latest situation lasts.
He cited a similar episode last year when Iran and Israel also launched strikes during a 12-day period.
“When that ended, prices normalized immediately. So we’re hoping it will depend on how long the situation will persist, and we’re hoping it can normalize soon,” Fernandez said.
But since the Middle East is a major supplier of oil, including natural gas, an increase in prices is imminent if there are supply constraints, Fernandez said.
If the prices of these energy sources go up, demand for coal may then become more robust, subsequently resulting in higher prices for coal.
About 60 percent of Meralco’s power supply needs come from natural gas; 20 percent to 25 percent is from coal; 10 percent from renewable energy; and the remaining 5 percent to 10 percent is from the Wholesale Electricity Spot Market.
Meanwhile, Meralco chair Manuel V. Pangilinan said the power distributor would assess its fuel position, especially liquefied natural gas, coal and diesel.
“We want to ensure an adequate supply of power and manage price volatility as responsibly as possible,” he said.
Meralco, the largest power distributor in the Philippines, delivers electricity to Metro Manila, Bulacan, Cavite, Rizal and some parts of Pampanga, Laguna, Batangas and Quezon.
Pangilinan urged Filipinos to be “mindful” of power consumption.
“We import much of the fuel used to generate power—we can all help to have enough power to get through the next few weeks if we conserve power,” he said.
Energy Secretary Sharon Garin noted that only 3 percent of petroleum product consumption in the country is for electricity.
“There will be an indirect impact because the shipping costs of coal might be affected, but we haven’t noticed anything yet,” Garin said.
Jetti Petroleum president Leo Bellas told the Inquirer that if the government suspends all fuel excise taxes, consumers may get a break from surging pump prices by as much as P10 per liter.
“Prices could go lower actually since the VAT (value-added tax) component will go down as well,” Bellas added.
