No respite from high

DESPITE the recent drop in crude prices, Manila Electric Co. on Friday said customers should expect no reduction in the generation component of their electric bills until January next year.
In a statement, the Philippines’ largest electricity distributor said higher natural gas prices of its contracted independent power producers (IPP) has caused a rise in generation charges in customers’ November bills.
The Lopez-controlled utility said its customers’ electricity bills would reflect a P0.30 to P5.0319 per kilowatt-hour increase in generation charges, which are collected by the company’s suppliers, in light of the increase in the cost of natural gas.
The cost of natural gas alone accounted for 75 percent of the billings to Meralco of two First Gas plants, which are also controlled by the Lopezes. Those facilities supplied 40 percent of the distributor’s requirements last month.
Ivanna de la Peña, Meralco vice president for utility economics, said the increase was brought about by high crude prices in the middle of the year that are reflected in natural gas prices, which are benchmarked to the former.
“The cost of natural gas for October 2008 was set using average prices from April to September 2008 which include peak levels in May to July 2008. Because of the lag, the significant reductions in world oil prices this quarter will only be reflected in gas prices in January,” the Meralco official said.
De la Peña said a substantial portion, estimated at 55 percent of the cost of natural gas, represents payment of royalties to the government. At current prices, the royalty share amounts to over P2.60 per kilowatt-hour.
She said the company expects natural gas prices to go down, as First Gas plans to temporarily use cheaper banked gas to lower rates in December and January. “Banked gas is that which was not consumed in 2002 to 2003 and thus is priced much lower,” she said.
-Euan Paulo C. Añonuevo

This article explained that the meralco electric corporation would not cut the electric fee. I was really confused about something from this article. One part of it was when the article said “estimated at 55 percent of the cost of natural gas, represents payment of royalties to the government. At current prices, the royalty share amounts to over P2.60 per kilowatt-hour.” Reading this, I learnt new information about this topic. The government does not participate to public sectors like electric, telecommunication and internet corporations. I want to say that those sectors are in indispensible conditions for all people. If we try to look around us, everybody uses electricity and telephones but the common thing is these corporations are a private company in the Philippines. It can indicate that when owners want increase the fare fee, I think there is two effects. First, the corporation will increase its profit and asset. Second, all people have to pay more electricity and telephone fees, therefore, people will suffer from the decreased budget. By thinking about this theory, I had an interesting result. According to my research, the Philippines electricity fee is unfair. Japan was ranked first place in the most expensive electricity fee in Asia but the next to Japan is the Philippines. Is that possible? The Philippine electric fee is more expensive than other rich countries such as Korea, Hong Kong and Singapore etc. why is this unfair?? Let’s compare Philippines and other Asian country’s minimum wage. The Philippine minimum wage is 362peso per DAY but Japan’s minimum wage is $10 dollar per HOUR. Telephone and electricity fees are not really different among other Asian countries. I mentioned this problem because nobody can live without electricity, maybe we can live without the telephone, but most of the people on Earth own a cell-phone and is already a big part in business and whatsoever.
My point is, the government must change this situation. I think only the government can change this rule. For example Japan and Korea, the electricity and telecommunication corporations have a difficult time to increase the fare fee due to government holding their stock more than half by law. That’s why they cannot increase the fare fee by their own decision. Electricity and telecommunication business is kind of in the part of the public sector in Japan and Korea. I suggest that the government must control the fare fee because electricity and telecommunication is common to all of us. A definition of a government is “government of the people, by the people, for the people.”

Source :
http://www.manilatimes.net/national/2008/nov/08/yehey/business/20081108bus6.html