Palace, Senate want changes in oil industry’s deregulation

MALACAÑANG said it will rally its allies in Congress to amend the Oil Deregulation Law amid government findings that oil companies are overpricing their products.

At the same time, the Palace ordered Energy Secretary Angelo Reyes to investigate the National Economic and Development Authority’s finding that gasoline is being overpriced by as much as P8 a liter.

At a briefing yesterday, Executive Secretary Eduardo Ermita said the deregulation law allowed oil companies to immediately pass on any price hikes in the world market to consumers, but the Energy Department should step in if those were excessive.

“Due to the Oil Deregulation Law, oil companies feel they can do whatever they want. But if it goes beyond the limit, the Energy Department can [take] them to task,” Ermita said.

He said the Palace would support a measure to amend the law that would strengthen the government’s hand.

“We have seen that under this law, the government can do nothing to interfere with oil prices under a free-market regime,” Ermita said.

Earlier, Reyes said that law prevented him from stopping excessive increases in pump prices.

“The executive branch should be preparing itself for such action [amending the deregulation law]. We should study very closely the situation in the oil industry and if we will support the repeal of the Oil Deregulation Law,” he said.

Citing a simulation run by NEDA, Economic Planning Secretary Ralph Recto told lawmakers Tuesday that unleaded gasoline should cost about P32 a liter, but gas stations were selling it for P38 to P40.

Recto made the statement after a series of oil price increases over the past weeks.

”I haven’t discussed the matter with Secretary Reyes, but since this issue has come up, I will remind him. We will find out what future steps [the department] will take to conduct an investigation,” Ermita said.

Senate President Juan Ponce Enrile yesterday said Justice and Energy officials should file charges against oil companies refusing to open their books of account so the government could verify their earnings reports.

Enrile said overpricing could well be one reason the oil companies had refused to allow a government audit of their books.

“They should jail officials of oil companies who are violating the law,” Enrile said.

“They should enforce the law and talk less. Get the machinery of government moving so that those who are duping the public should be jailed,” he said.

Senator Francisco Escudero regretted that the oil companies were using the deregulation law to hold the public hostage and to protect their own interests.–Joyce Pangco Pañares  with Fel V. Maragay, Manila Standard Today