Transport groups slam oil price hike

MANILA, Philippines – Public transport groups condemned yesterday the latest increase in the pump prices of gasoline and other petroleum products.

Members of the Alliance of Concerned Transport Organizations (ACTO) also called on the Land Transportation Franchising and Regulatory Board (LTFRB) to approve the pending petition for a P1 fare increase for passenger jeepneys.

Major oil companies increased yesterday the pump prices of petroleum products, including a P2 per liter hike for diesel, which is used by jeepneys and most commuter vehicles.

Pilipinas Shell, Petron, Chevron (formerly Caltex) and Seaoil Philippines also increased pump prices of unleaded premium gasoline by P1.25 per liter, regular gasoline by 80 centavos per liter, and kerosene by P1.50 per liter.

Efren de Luna, ACTO president, said that the P1.25 hike in unleaded gasoline and the P2 hike in diesel were made at the wrong time when many jeepney operators and drivers were still reeling from the effects of tropical storm “Ondoy” and typhoon “Pepeng.”

Ondoy caused massive floods in Metro Manila and nearby provinces. The floods damaged many houses and submerged thousands of vehicles, including passenger jeepneys, taxis and buses.

“Many operators and drivers have not yet recovered from Ondoy and Pepeng and now they (oil firms) hike oil prices. It is very insensitive of them. So the government should not deprive us of a fare hike,” De Luna told The STAR.

De Luna said that the LTFRB should grant a provisional fare increase of 50 centavos pending the public hearings on the P1 fare hike.

“I think this is only reasonable. Diesel is now P30 (per liter) from P28. When the prices were low, we kept quiet on our pending fare hike petition. But since the price has again gone so high, then we believe it’s about time that they give us a fare hike,” De Luna said.

The Pagkakaisa ng mga Samahan ng mga Tsuper at Opereytor Nationwide (PISTON) also denounced the latest oil price hikes.

George San Mateo, secretary-general of PISTON, challenged the Arroyo administration to stop the oil companies from hiking prices.

He proposed that the implementation of the Oil Deregulation Law should be suspended to impose price control on petroleum products during the current state of calamity.

“We are calling on Malacañang and Congress to immediately scrap the Oil Deregulation Law and audit the books of the oil companies,” San Mateo said.

Lawmakers hit oil companies

Speaker Prospero Nograles assailed Pilipinas Shell and Petron Corp. for increasing pump prices yesterday even as the country is still reeling from extensive devastation caused by Ondoy and Pepeng.

“It’s the highest form of ingratitude,” he said of the two oil companies’ decision to increase prices.

Nograles said these firms rake in billions in profits every year because people patronize them and they should at least “spare the people from further bleeding at this time.”

“This is really infuriating. While people around the world are trying their best to help us recover from the devastation caused by Ondoy and Pepeng, our own oil companies still have the nerve to increase their prices. This is the highest point of ingratitude,” he said.

He stressed that the adjustment also reflects the oil companies’ insensitivity and lack of compassion for the millions of patrons whose lives are now in ruin because of Ondoy and Pepeng.

At the same time, Nograles questioned Energy Secretary Angelo Reyes’ inaction on the increase, saying that the secretary could have at least appealed to the two big companies to suspend rate adjustments “until after the country has returned to a decent level of normalcy.”

“Secretary Reyes could have at least appealed for compassion. Millions of people have lost their homes and are largely dependent on whatever support that is given to them by others. This makes me wonder if the Department of Energy is still part of the government,” he said.

Other congressmen also criticized the oil companies for their price adjustments.

Presidential son and Pampanga Rep. Juan Miguel Arroyo has shared the assertion of former senator and former socio-economic planning secretary Ralph Recto that local oil prices are overpriced by as much as P8 per liter.

Despite their criticism, lawmakers are at a loss on what to do with the frequent oil price increases.

Recto has suggested that Congress define oil overpricing, saying the Oil Deregulation Law is silent on what is excessive pricing.

Rep. Arroyo, chairman of the House committee on energy, said the latest oil price increase is an insult and an affront to the Filipino people, at a time when they are contemplating on imposing price caps in calamity areas.

“I view the latest round of oil price hikes not only as an insult, as it comes on the heels of my proposal for a special mechanism for oil price management in times of crisis,” he said.

It is likewise a “direct challenge” to the administration of his mother, President Arroyo, which had been “trying so hard to control the prices of basic commodities to help ease the impact of the recent calamities on the people.”

“This is most disgusting, despicable and outright insensitive. I condemn it in the highest sense,” he added.

Rep. Arroyo reiterated his call for an audit of the financial books of the oil companies.

He is now coordinating with Trade Secretary Peter Favila regarding the mechanics of the oil price management he is proposing and will present it later to the oil companies for implementation.

“People might get the impression that the oil companies are burning their bridges (to) Philippine society,” he said.

Oil firms justify price hike

Shell said the latest price hike on petroleum products is to reflect the “significant” increase in international product prices.

“Dubai crude, Mean of Platts Singapore gasoline and diesel prices generally gained more than a dollar this week. Gulf countries reportedly held secret meetings with officials of China, Russia, Japan and France outside the region to discuss dropping the dollar for oil trade,” the Department of Energy (DOE) oil monitor report indicated.

Oil prices jumped above $79 a barrel to a 2009 high last Monday in Asia as investors looked to the corporate earnings of big US retailers this week for signs of regained consumer confidence.

The oil firms implemented the huge oil price hike in the face of the directive of Energy Secretary Reyes to the Department of Energy-Department of Justice (DOE-DOJ) task force to investigate complaints of overpricing lodged by the government of Cebu against the big three oil companies.

In a memorandum, Reyes enjoined the task force to investigate any complaint or report pertaining to any violation provided in Sections 11 and 14 of Republic Act 8479 or the Oil Deregulation Law, particularly that filed by the Cebu provincial government, which had complained about the big difference of prices in Cebu and Manila.

“They (Cebu government) complained about a P5 to P6 per liter price difference of oil prices in Cebu and Metro Manila. I want to get to the bottom of this and see if we need to file a case against these oil firms,” he said.

Petron president Eric Recto said: “We are open to any move by the DOE to ensure that oil prices are fair and reasonable. We have always cooperated with the DOE in the interest of transparency and will continue to do so.”

Reyes also ordered the task force to resolve as soon as possible all cases pending with it, including the predatory pricing case filed by Flying V against Chevron.

There were proposals to include petroleum products in the price control list that the government released following the devastation caused by Ondoy and Pepeng.

In his letter to Finance Secretary Margarito Teves dated Oct. 19, Reyes sought the DOF’s official stance on the price control over petroleum products.

Reyes had earlier said that putting a price ceiling on petroleum products would create more problems than solutions.

In his letter to Teves, Reyes reiterated that “pricing of petroleum products is deemed part of the direct operations of the oil industry. But with petroleum products practically all imported (whether crude oil or refined petroleum products), controlling prices – i.e., keeping them low – may not be in accord with international prices, which have been volatile, and in an increasing trend. Without any subsidy, the pricing issue can easily become a supply problem.”

“It may be recalled that petroleum products – e.g. gasoline, diesel, kerosene, LPG and lubricating oils – used to be regulated by the Energy Regulatory Board, where prices were kept low through the Oil Price Stabilization Fund, to which the government had to directly infuse about P14 billion (P5 billion through RA 6952, P9 billion remittance by the Philippine National Oil Co. from proceeds of Petron sale, less P3 billion to National Power Corp. by RA 7639, and buffers for the transition phase of P1 billion for RA 8180 and P2.9 billion for RA 8479), plus another P4 billion through tax credits for outstanding claims by the oil companies pursuant to Section 21 of the Oil Deregulation Act,” he said.

Reyes also wrote a separate letter to Justice Secretary Agnes Devanadera, seeking the DOJ’s legal opinion on the price ceiling issue. –Rainier Allan Ronda (The Philippine Star) with Delon Porcalla, Donnabelle Gatdula, Jess Diaz