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Sunday, December 21, 2014

Meralco expects oil price dividend

The country's biggest electricity distributor expects a dividend from the weakness in the international market for crude oil.

Manila Electric Co president Oscar S. Reyes said the continued dip in world oil prices could bring down power rates, encouraging higher demand.

Global oil prices have slumped on the back of higher production of U.S. shale oil coupled with the OPEC's refusal to cut production.

Consequently, the international oil cartel and the International Energy Authority separately forecast softer demand in 2015.

About 40 percent of Meralco's electricity supply is fueled by the Malampaya natural gas from offshore Northwest Palawan. The price of Malampaya gas is indexed to world oil prices.

Alfredo S. Panlilio, Meralco senior vice president, said sales volume would likely grow between 3 and 3.5 percent in 2015.

This is about the same increase the company expected this year, propped up mostly by an uptick in demand in the second half after the cooler weather in the first few months tempered electricity use.

“Next year, we are looking at around 3 to 3.5 percent driven by the same factors," Panlilio said.

These figures, however, do not account for possible pre-election spending that could boost demand, he added.

In the first nine months of this year, Meralco's profit rose seven percent led by growth in sales to its commercial and industrial customers.

- Interaksyon

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