PSE Circular for Brokers No. 2476-99

October 1, 1999 PSE CIRCULAR FOR BROKERS NO. 2476-99 PETRON REDUCES LPG PRICE BY 20 CENTAVOS PER LITER AND INCREASES OTHER FUEL PRICES The cost of crude has continued to rise consistently. Since Petron's last price adjustment on August 23 (based on the price of crude in July), the cost of crude has gone from $17.91 per barrel to nearly $23.00. Our actual crude costs for product sales towards the end of September are based on the August price of $19.56 per barrel, reflecting an increase of $1.65 per barrel since July. Additionally, the peso/dollar exchange rate has deteriorated from P38.30 in July to P39.35 in August. After carefully evaluating the situation, we have decided to adjust prices in the most restrained way and in a way that is sensitive to the needs of the public. At 12:01 a.m. today, we rolled back our LPG price by 20 centavos per liter or almost P4.00 per 11-kilogram cylinder, and decided to keep our diesel price at the lowest possible level as desired by the public. Thus, the price of our diesel in Metro Manila is now pegged at P9.55 per liter. On the average, we have adjusted our product prices upward by only 34 centavos per liter. This is a partial increase considering that July to August Dubai crude costs have increased by 58 centavos and that we have accumulated significant underrecoveries for previous monthly crude price increases. Petron has deferred this adjustment for as long as we can. But inventories of crude purchased at old prices have already run out and we are feeling the pressure from our higher crude costs. Between March and August, the peso landed cost of crude went up by P2.60 per liter, but our product prices had increased by only P1.54. As a comparison, in the highly competitive U.S. market, the price of gasoline has gone up by P3.26 per liter since February. On the other hand, our gasoline price has only gone up by P2.46 per liter, including today's increase. Presented below are Petron's price adjustments: Metro Manila Prices Product Peso per liter Increase (Decrease) Extra Premium 0.85 Unleaded Premium 0.75 Regular Gasoline 0.65 Kerosene 0.65 LPG (Gasul) (0.20)