Take over oil industry, senators urge Arroyo

MANILA, Philippines—Warning of food riots and a stagnating economy should a fuel shortage occur because oil firms were not importing new stocks, three senior senators on Tuesday urged President Gloria Macapagal-Arroyo to take over the oil industry.

Senate President Juan Ponce Enrile, Senate Minority Leader Aquilino Pimentel Jr. and Sen. Miriam Defensor-Santiago also asked the government to import petroleum products to protect the people.

The three senators said government intervention was needed to address the fuel shortage brought about by oil firms protesting a controversial Palace order that imposed fuel price caps in Luzon, which is in a state of calamity because of the heavy damage wrought by recent storms.

Accusing oil firms of engaging in “muscular politics,” Santiago said the government should take over the oil companies.

She said Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron Philippines Inc. were trying to pressure the President “to do as they wish.” The question now, she said, was “how intrepid and brave our President can be in standing up against the three oil companies.”

The Constitution allows a government takeover of oil companies, especially since the country is in a “genuine calamity or emergency,” Santiago said.

She was reacting to the statement of Energy Secretary Angelo Reyes the other day that the country’s inventory of finished petroleum products had dropped to as low as eight days, below the usual 21 days, because oil firms were not importing the products due to the fuel price caps in Luzon.

Reyes said no one could force private corporations to sell at a loss indefinitely.

Small oil firms have been forced to either curb or withhold importation to avoid incurring huge losses they cannot absorb because of the imposition of Executive Order No. 839 freezing fuel prices in Luzon at their Oct. 15 levels.

Total Philippines said that as early as last month it had stopped importing fuel products because it could not sell at a loss. It claimed that its inventory of diesel was good until Nov. 17, while its gasoline supplies may last until the end of the month.

Don’t blackmail gov’t

Malacañang on Tuesday cautioned oil companies against blackmailing the government and the public with threats that the supply of petroleum products in the country would run dry in less than two weeks.

“The government is not going to be blackmailed by anybody,” Gary Olivar, deputy presidential spokesperson, told reporters.

“Nobody should make the mistake of trying to [threaten] the government—any government including us—because you’re never going to win a game like that,” Olivar said.

Seize facilities

Enrile and Pimentel said the government should import oil.

The government can even “seize” oil facilities because it has no distribution system in the event it does import oil, the Senate president said.

“If they (government) want, they have to seize the retail outlets of these companies and then bring in the supply,” Enrile said.

But he admitted that this action though would be “messy.”

Nevertheless, Enrile said the government could use its police powers to achieve this. He said the government could do anything when the people were in trouble.

“You just imagine a situation in which there is no fuel in the country. Nothing can move. You can starve Manila in a few days … I’ll tell you, three days of no transportation around the country, you’ll have food riots in Manila,” Enrile said.

Pimentel said the government could import oil under the general welfare clause of the Constitution.

Artificial

The impending oil shortage is “artificial” because there is after all no shortage on the world market, he said.

“It’s artificial in a sense that the oil companies do not want to import stocks because they don’t want government to dictate to them on the prices,” the Senate minority leader said.

Like Santiago, Pimentel said the price caps should have been implemented in areas that were greatly devastated by the recent typhoons and not in the whole of Luzon.

State of calamity under review

Ms Arroyo on Tuesday ordered the National Disaster Coordinating Council (NDCC) to determine whether the government could already lift the state of calamity in Luzon.

“It was agreed upon during the Cabinet meeting for the NDCC to determine if there is still a state of calamity because that became the legal basis for EO 839,” Director General Augusto Santos of the National Economic and Development Authority said after the Cabinet meeting in Bohol province.

Santos was referring to Ms Arroyo’s order, which froze oil prices at their Oct. 15 levels in response to the devastation wrought by recent storms. The price ceiling initially covered the entire archipelago, but was later limited to Luzon.

At the Cabinet meeting, the joint task force of the energy and justice departments submitted its official report on the implementation of EO 839, according to Press Secretary Cerge Remonde.

Santos said the threat of a supposedly looming shortage of finished petroleum products should not be a cause for alarm.

Price manipulation

The threat of an oil shortage only confirmed suspicions that the oil firms were manipulating their prices, according to Speaker Prospero Nograles.

Nograles said the price freeze merely reflected the price of the oil firms’ inventory that they acquired at lower prices.

“If they are running out of stock only now, why did they raise their prices as early as last month? If the President did not order a freeze to Oct. 15 levels, the oil companies would have gotten away with it,” said Nograles.

Bayan Muna party-list Rep. Satur Ocampo said the threat of a supply crisis being peddled by Reyes was a big lie to force Malacañang to lift EO 839.

Parañaque Rep. Roilo Golez said that Reyes’ revelation was more of an indictment of the Department of Energy’s failure to monitor supplies because he should have sounded the alarm bells as soon as supplies fell to the critical 30-day level.

Lawyering for oil firms

Senators also rapped Reyes for “lawyering” for the oil companies.

“Why doesn’t he say for example, ‘Once they cut off the supply we will do this or that under the law,”’ Santiago said.

Sen. Manuel “Mar” Roxas II said it was “obvious” Reyes was “again conspiring with the oil companies to further the suffering of our people.”

But Sen. Benigno “Noynoy” Aquino III said he favored the lifting of EO 839 but wanted to look at the pricing systems of the oil players. –Christine Avendaño, Christian V. Esguerra, Gil C. Cabacungan Jr., Philippine Daily Inquirer