MANILA - The Philippines edged closer on Tuesday to lifting a cap on fuel prices in the typhoon-stricken island of Luzon, after the country's president urged a government panel to decide if the area's calamity status should be removed.

The government ordered the state of calamity in early October to give local officials access to emergency relief funds as typhoons destroyed nearly 39 billion pesos ($831 million) in crops and infrastructure and killed 961 people.

To help Filipinos cope with rebuilding costs, President Gloria Macapagal Arroyo on Oct. 23 ordered oil firms to maintain pump prices in Luzon at Oct. 15 levels.

But Manila imports almost all its fuel needs and the cap has meant the firms will be operating at a loss because of a run-up in global crude prices, which have risen nearly 77 percent so far this year.

Socio-economic Planning Secretary Augusto Santos said the country's inter-agency National Disaster Coordinating Council (NDCC) would have to meet as soon as possible and come out with its decision.

Since the executive order was implemented because there was a state of was agreed that the NDCC will decide if we are still in a state of calamity, Santos told reporters after cabinet officials met Arroyo.

The inventory of refined petroleum products in the Philippines has dropped to between 8 and 13 days of consumption from the usual 21, government officials said on Monday, as imports have slowed and supplies have dwindled at many gasoline stations.

World oil prices stood above $78 a barrel on Tuesday, fed by a surge in global equities and a sharp fall in the U.S. dollar. [O/R]

Top Philippine refiner Petron Corp said last month it expected to incur a net loss of 1.5 billion pesos in the fourth quarter, partly because of the price freeze. ($1=46.925 pesos) (Reporting by Manolo Serapio Jr.; Editing by Clarence Fernandez)