House now ready to wage war, impose severe penalty against oil smugglers

After having been exposed they have robbed the government of P93.3 billion in taxes from the period 2006-2008, Speaker Prospero Nograles yesterday bared Congress would make a much firmer stand against oil smugglers, saying any form of economic sabotage should be dealt with severe penalty.

“These losses in terms of taxes could even be an underestimation of the real score in the underground,” Nograles said, adding “this is clearly an act of economic sabotage that needs to be penalized severely.”

At the same time, Nograles admonished the “Big 3” oil firms for resisting a court ruling which requires the companies to open their book of accounts for public and transparent audit.

“They should open their books because even the Oil Deregulation Law is very clear in its provision on predatory pricing and other unfair trade practices. If our oil companies are true to their word that there is no price manipulation on their part, I don’t think they should even contest this particular court ruling,” Nograles said.

It was reported that Philippine Institute of Petroleum executive director Sally Montiero openly said, at an open hearing of the House committee on energy headed by Rep. Mikey Arroyo, that about P93.3-billion was lost in terms of government tax revenues from oil smuggling from 2006 to 2008 alone.

It is incumbent upon us in Congress to pinpoint existing provisions of relevant laws and make the necessary revisions or reformative amendments, including the imposition of the heaviest of penalties to deter smuggling, if indeed the facts presented were true, Nograles said.

Recently, a court ruling clarified that the government has the power to examine the books of accounts of oil companies and for the oil companies to open their books for scrutiny by government examiners.

The ruling came following a claim by Secretary Ralph Recto of the National Economic and Development Authority (Neda) that the oil companies continue to overprice their products by about P8 per liter.

Responding promptly, the oil giants also claimed the basis of the Neda calculation was incorrect or obsolete.

For his part, Anakpawis Rep. Joel Maglunsod insisted the Big Three oil companies should be compelled to open their books in the light of the latest round of oil price hikes.

The solon deemed as unacceptable the P1.50 per liter adjustment in prices of gasoline, diesel and kerosene imposed by Petron, Chevron and Pilipinas Shell.

He encouraged the Bureau of Internal Revenue, Bureau of Customs and Commission on Audit to expedite as soon as possible the decision of the Regional Trial Court (RTC) to open and examine the books of accounts of the three oil companies for public interest, saying “this will be a test case if the Arroyo government can wield its sovereign power over the Big Three.”

“The public is entitled to know the truth about the financial records and earnings of these big oil corporations. For all we know, these companies are arbitrarily raising oil prices to gain more profits at the expense of the public. Opening their books can help congressional investigations of their price manipulation and cartel operation.”

Maglunsod said increasing oil prices only means higher income and profit for oil companies. He cited Petron’s reported 32 percent net income growth to P874 million from P658 million in the January to March 2008 period despite lower oil prices.

With this, the solon reiterated the need to deregulate the downstream oil industry.

“The oil industry is a vital sector for the economy that should not be left to the hands of profit-making oil cartel.”

He said Congress should also hasten deliberations on House Bill 1724 that calls for the repealing of Oil Deregulation Law as well as passage of other measures that offer alternative and cheaper oil sources, centralized procurement of oil products and the buyback of Petron Corp.

“The call to nationalize the oil industry is heightened by this recurring situation of oil price hikes and the government’s powerlessness to secure affordable energy sources by determining oil prices principally for social consumption as part of its responsible governance rather than leaving it to private companies whose primary motive is to rake in profits,” he added. –Charlie V. Manalo, Daily Tribune