Oil firms cleared of overpricing

Energy Secretary Angelo Reyes has ruled that the recent oil price increases have been reflective of world market trends.

But House Speaker Prospero Nograles insists on the need to ensure that competition thrives in the local market by granting incentives to small oil players and make them tougher to fight the Big 3—Petron Corp., Pilipinas Shell and Chevron (Caltex) Philippines.

After a four-hour meeting with oil industry officials, Reyes said that “the price adjustments recently made [by the oil firms] fairly reflect the movements in the international market.”

Citing his department’s computation, Reyes said prices should have gone up by P1.97 per liter if the trend in world oil prices from Oct. 12 to 16 were used as basis. The oil firms raised diesel prices by P2 per liter on Tuesday.

Energy director Zenaida Monsada said their computations factored in the peso-dollar exchange rate.

Energy data also showed that gasoline should have gone up by P1.19 per liter; the oil firms added P1.25 to a liter of gasoline.

Meanwhile, Petron president Eric Recto said that local prices may go up again in the coming weeks if world oil prices would continue their uptrend.

“There is a strengthening of world market prices for crude. Of course when crude goes up, all of the related products—diesel, gasoline—will also go up. If the outlook is bullish then we can expect product prices to move,” Recto said.

Following the price swings, Nograles vowed to conduct “marathon hearing and sessions” to pass a legislation that would support the small oil players.

A legislation being considered, Nograles said, is the granting of reduced import cost to allow the small players bring down the prices and force the Big Three oil firms to follow suit.

“It’s time to teach them a lesson. Profit taking is their religion and the government must now drive a hard bargain and support the small ones,” Nograles said, expressing dismay over the price hike the Big Three imposed even as the country was reeling from the onslaught of storms Ondoy and Pepeng.

Nograles said the oil deregulation law apparently fell short of its original intent and spirit that should demolish the “old monopolistic practices or cartelization” among oil companies.

Nograles admitted that repealing the oil deregulation law is easier said than done especially at this time when Congress is running out of time. –Alena Mae Flores and Christine Herrera, Manila Standard Today