Are country’s major oil players losing or raking in profits? ask lawmakers

The Department of Energy should fully exercise its oversight powers on the country’s oil players following the latest round of oil price hike allegedly to even out losses while one big oil player publicly announced that it posted a 59 percent increase in profit from January to September this year.

“Which is which? Are they really absorbing losses that’s why they are increasing oil prices or are they raking in profits? These oil companies are becoming too inconsistent. Halatang niloloko na tayo ng mga ito,” Ang Kasangga Rep. Teodorico Haresco said.

Davao City Rep. Karlo Alexei Nograles, on the other hand, said while oil companies are claiming that the increase in prices is due to the increasing demand for oil as winter sets in, they continue to ignore the fact that the US dollar depreciated several times against the Philippine peso which should offset the prevailing world market price.

Since last October, oil companies have been increasing their pump prices at an average of 25-50 centavos per liter. A few days ago, oil companies announced another round of price increase of around P1.50 to P2 per liter because of the alleged increase of prices in the world market.

Along with the recent oil price hike is the announcement of Petron Corp. that it posted a net income of P5.4 billion in the first nine months of 2010, an increase of 59 percent from P3.4 billion in the same period in 2009, due to higher sales.

“This is unconscionable. These oil firms still have the gall to announce that they are making so much profit while they continue to squeeze our people dry,” Haresco said.

“It leaves a bad taste in the mouth to see these oil firms punishing the public with mind-boggling price increases while bragging to the media that they have posted huge profits,” Nograles, on the other hand, said.

The two solons said they found it very inconsistent that oil companies are so quick to jack up prices at the slightest hint of a world market price adjustment or slightest depreciation of the Philippine currency but are so sluggish in bringing down their prices if the situation goes the other way around.

“They can have so many excuses whenever they are supposed to bring down their prices. I think that the Department of Energy should strengthen its oversight capacity over these oil firms,” Nograles said.

Haresco, for his part, proposed that Congress should move to amend the Oil Deregulation Law to strengthen its oversight provisions, possibly with the establishment of muti-sectoral panel that would exercise the government’s oversight function and, at the same time, set a uniform and acceptable standard for any price adjustment.

“As it is now, there are no clear criteria that are being cited to justify an increase or decrease in oil prices. Factors like inventory, world market price and currency exchange are being cited but in a very inconsistent manner. There should be a clear and indisputable criteria so that the public is fully assured it is not being shortchanged by these oil companies,” Haresco said.  –Charlie V. Manalo, Daily Tribune