NEDA data shows oil companies gouging Filipinos

THE National Economic and Development Authority (NEDA) on Friday said pump prices today should be P32 lower per liter if oil companies purchased crude in February or March.

In a statement, Socioeconomic Planning Secretary and NEDA Director General Ralph Recto said oil companies were charging as of April 16 as much as P40.85 per liter of premium plus unleaded gasoline, P39.71 per liter of premium unleaded gasoline, and P39.07 per liter of unleaded gasoline—or about P8.00 more than the estimated gasoline price of P32, based on the Oil Monitor of the Department of Energy (DOE).

 “Assuming that oil companies had purchased their stock of Dubai crude at $50 per barrel or P2,408 per barrel based on an exchange rate of P48.16 to the dollar at that time, then pump prices of domestic gasoline should be about P32.16,” Recto said.

 “However, if they had purchased Dubai crude in February or March as some of them keep an inventory of 30 to 60 days, then prices should even be lower,” he added.

Dubai crude stood at $42.21 a barrel, or P2,024 a barrel, assuming an exchange rate of P47.96 to $1, as of February 20, and $44.51 a barrel, or P2,149 a barrel, assuming a forex rate of P48.29 to $1, as of March 20.

 Quoting historical data to estimate the P32.16 price, Recto said that when Dubai crude was at P2,176 a barrel in February 2005—at $39.70 barrel and an exchange rate of P54.81 to $1—domestic gasoline was at P27.37 per liter. At P2,495 a barrel—or $45.84 per barrel on a forex rate of P54.44 to $1—in March 2005, domestic gasoline was at P29.22.

 “Thus, interpolating the cost of domestic gasoline at P2,408 per barrel given the above Dubai crude and pump prices, it would be at P32.16,” the NEDA official said.

The NEDA’s computations come on the heels of a court order directing oil firms to open their books to the government.

Recto said that even the most expensive gasoline in the United States, which is the premium reformulated retail gasoline, costs $2.343 per gallon, or P29.57 per liter at an exchange rate of P47.77 to $1 as of April 20. One gallon is equal to 3.785 liters.

“Government may not have the tools to lower oil prices under the deregulation law and therefore must collect the appropriate taxes from the oil companies so we may make the necessary investments for health, education, social protection to help the poor as well as in renewable energy,” he said.

“When the global economy rebounds, oil prices will again hit the roof. Thus it is important for Congress to enact legislation that would empower the government to protect consumers,” he added.

Various consumer groups have been pushing for a revision of the Downstream Oil Sector Deregulation Act, which they blame for the Energy department’s impotence against what the public perceives is unreasonable price increases. –Darwin G. Amojelar, Senior Reporter, Manila Times