Shell sues govt on legality of freeze order

SHELL has petitioned a Makati court to lift a presidential order freezing petroleum prices at their Oct. 15 levels, claiming it and the other oil firms have lost billions of pesos as a result of selling their products at a loss.

The company petitioned against Executive Order 839, which took effect on Oct. 24, and named as respondents Executive Secretary Eduardo Ermita and Energy Secretary Angelo Reyes, the heads of a task force imposing the order.

The company asked the court to stop the order, saying it was illegal.

President Gloria Arroyo issued the order after three successive storms devastated Luzon including Metro Manila, saying a freeze on prices would ease the suffering of the people affected.

“[But] Executive Order 839 failed to meet certain conditions prescribed under the Philippine Constitution, including the determination of exceptional circumstances warranting the exercise of emergency powers, among others,” vice president for communications Robert Kanapi said.

On Wednesday, Shell and the other oil distributors took out an ad urging Mrs. Arroyo to recall her order.

“ We are one with you in wanting to help the victims of [tropical storm] Ondoy and [typhoon] Pepeng,” the companies said in their ad.

“We believe, however, that freezing the prices of fuels throughout the entire island of Luzon to help the typhoon victims, found only in several provinces in the North and in some areas of Metro Manila and outlying provinces, carries disastrous short- and long-term risks for the whole country, including eventually the very people we want to help.”

The companies also asked to discuss the issue with the President, but Mrs. Arroyo on Thursday said they could talk with her secretaries.

And yesterday she told the task force carrying out her order to investigate gas stations that have shut down, saying the people running them could be charged with economic sabotage for creating an artificial shortage.

“They cannot blackmail this government,” Press Secretary Cerge Remonde said.

“The President is determined to protect the interest of consumers in this time of calamity, when people really need all the help they can get.

“We should not be fooled by their statements because we know they have a long-term supply contract, and the supply they are now selling are from their existing inventory.”

Remonde made the statement even as Petron Corp. said it will raise the price of its cooking gas by P3.50 a kilogram in the Visayas and Mindanao to reflect higher prices abroad.

Oil prices rose above $80 a barrel in Asia on Friday as oil investors eyed a surge in global stock markets.

Benchmark crude for December delivery was up 47 cents to $80.09 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 78 cents to settle at $7962 on Thursday. Alena Mae S. Flores, Joyce Pangco Pañares, AP