MANILA (AFX-ASIA) – Energy Secretary Vicente Perez Jr said he has asked the Finance department to consider suspending the import duty on diesel fuel to avert an increase in transportation prices.

“We have been having intense discussions with the Finance department in this regard. We are hoping that a limited suspension in terms of the time period and product would be favourable to the Finance department,” he said.

Transport groups earlier threatened to seek a fare increase once the price of diesel rises beyond 15.50 pesos per litre. (US$1=54 pesos).

That threshold was breached over the weekend as oil companies implemented a 0.50 pesos per litre increase in gasoline, diesel and kerosene prices.

The Cabinet had earlier shot down proposals to suspend import duties on petroleum imports due to the fiscal deficit.

The energy department said the threat of war in Iraq continues to exert pressure on oil prices, with the benchmark Dubai crude now at US$30/barrel.