Noy’s dare to oil firms to open books ‘silly’ — Serge

Published by rudy Date posted on April 29, 2011

An administration ally in the Senate yesterday twitted President Aquino’s call on oil companies to open their financial records to public scrutiny as well as planned moves to “freeze” fuel price increases, saying there is no existing law to hold these com-panies liable for “overpricing” pet-roleum products.

“Sometimes, I think the govern-ment is being as silly as Filipino consumers by saying that we will check on their (oil firms) books. But what will you check? You’re making people believe that you can find some proof that they’re over-pricing when there is no such crime called overpricing in this country as far as oil products are concerned,” Sen. Sergio “Serge” Osmeña told reporters during a forum at the Senate.

The lawmaker was referring to the challenge made by Aquino to the major oil firms in the country to open their financial records to prove

that they are not taking advantage of the consuming public.

This came about just as when Justice Secretary Leila De Lima announce that the government might resort to an extreme legal measure to cushion the effects of continuing increase of oil prices.

De Lima said the issuance of an executive order is being studied to freeze further price adjustments or effectively ban new round of price increases.

But Osmeña, also the chairman of the Senate energy committee, merely laughed off these pronouncements, especially in the light of the fact there exists no law that could hold them accountable for any supposed irregularities and the current deregulated system being implemented in the country in the oil industry.

“(In calling for a review of the books of the oil companies) that’s to find out if they have some collusion in settling prices but there’s no law (against this). There’s no law in our country that limits the margin of profits on oil companies. So what will the government check on the books of oil companies?” he asked.

“When we passed the Oil Deregulation Act in 1998, we totally deregulated pricing for oil products. We left it up to the market competition to determine what the price will be. There’s no penalty you can impose on somebody who wants to charge 100 percent profit margin,” he stressed.

As such, Osmeña said the oil companies cannot be accused of being abusive in their practice of jacking up pump prices amid the Middle East crisis, where most supply of oil is coming from.

“What we’re going to watch out in the oil companies is collusion in the oil pricing. Are they really talking to each other? Why is it that they’re imposing almost the same rate of increase in their products? But it’s going to be difficult to prove that. But really, there should be no price collusion,” he said.

In principle, Osmeña explained, there’s no overpricing of oil because giant oil-producing companies actually sell to traders.

The best thing that can be employed to mitigate the impact of the oil price increases is to “learn to adjust,” he said.

“We have to adjust and we will adjust. We’re not going to die,” Osmeña added.

Two House members, for their part, also yesterday urged Speaker Feliciano Belmonte to support moves to repeal Republic Act (RA) 8479, or the Downstream Oil Industry Deregulation Act of 1998.

According to Bayan Muna Rep. Neri Colmenares and Quezon City Rep. Winston Castelo, the unabated increases in the prices of petroleum products should be reason enough to repeal the law which has triggered high cost of living in the country.

“I hope the Speaker would change his mind and support moves to repeal the Oil Deregulation Law because this is what the people need now in light with this serious problem besetting the nation,” Colmenares stressed.

But Castelo admitted that current moves to review the law will not result in lower oil prices.

“A mere review of the Oil Deregulation Law will not lower oil prices, not even the filing of charges against the three oil cartels cannot legally compel them to decrease their oil rates. Unless we repeal the Oil Deregulation Law, major players could always argue pegging their prices against prevailing market forces,” he said.

Castelo maintained that the oil price increases do not have a basis except for the profit of the oil companies.

He stressed the oil deregulation law failed to fulfill the purpose for which it was enacted – a competitive market, fair prices and adegquate supply of oil and petroleum products.

Belmonte said the situation on the skyrocketing prices of petroleum products is temporary amid the armed and political conflicts in oil-producing countries.

“Scrapping it or changing it from deregulation to regulation is something that requires a lot of talks and my own personal view is, I am not in favor of it,” Belmonte told House reporters.

He maintained that there are ways that could cushion the effects of the high oil prices.

“We have to try to take measures to alleviate these situations which I think are temporary. I think we went through a long process of finally deregulating the industry and that was the right move,” he said.

But the Speaker added the law could be amended.

Meanwhile, Malacañang said the initial P450-million fund of the government for the Public Transport Assistance Program (PTAP) which is set to be implemented on Monday may be increased to over P1 billion owing to the lower than expected budget deficit posted by the country for the first quarter this year.

Presidential spokesman Edwin Lacierda echoed Budget Secretary Florencio “Butch” Abad’s reported projection that the government would be able to fund more subsidies especially for the transport sector amid the unabated rounds of oil price hikes at the world market.

“With the much lower than expected budget deficit, we can hopefully use those funds to assist in the subsidies that we have put out and we’ll use those funds also to address any crisis in the future… I don’t want to give a concrete figure but certainly we can give more than a billion to the fuel subsidy,” Lacierda told reporters.

He said the government through the economic team considers extending the implementation of the PTAP to another month or two while the oil crisis in the country lingers on, adding that fishermen and farmers would certainly be included in the fuel subsidy.

Lacierda, however, explained that insofar as the agriculture sector is concerned, the government still has to verify the 10-inch list of possible recipients Agriculture Secretary Proceso Alcala in order to determine that the fuel assistance goes to legitimate beneficiaries.

“This is the concern that we have with the fisherfolk and farmers, unlike the jeepneys and tricycle drivers; we know who have legitimate franchises. For the farmers and fisherfolk, Alcala submitted 10-inch compilation, covering entire Philippines, (as) qualified benefi-ciaries being determined. It would take a bit of time (for us to complete the process) but certainly, the directive has been given — we will help the fisherfolk and the farmers,” Lacierda said.

Aquino has earlier called for a thorough study to be conducted to avoid double registration of farmers and fishermen who were included in the Department of Agriculture’s list of qualified beneficiaries.

Lacierda said Aquino is already preparing for his big announcement on Labor Day where he is expected to deliver the “good news” for the Filipinos, touching on the issues of high fuel prices and the continuous demand for a wage increase.-Angie M. Rosales, Aytch S. de la Cruz, Daily Tribune

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