Petron slams deregulation

THE Oil Deregulation Law was responsible for “opening the floodgates” of oil smuggling in the country,” Petron Corp. said.

Passed in 1998, the law ushered in the entry of new players into the oil industry and paved the way for smuggling operations, said Petron chairman Ramon Ang.

“Smuggling became prevalent when the industry was deregulated. Any Juan de la Cruz can now import gasoline and diesel. You can become an overnight billionaire if you import and not pay taxes,” he said.

The Philippine Institute of Petroleum told the House energy committee that the government lost some P93.3 billion in revenues from 2006 to 2008 due to oil smuggling.

There is a strong basis for the studies which reported that 30 percent to 35 percent of today’s oil supply come from oil smuggling, said Ang. “The figures from these studies show that government loses about P30 billion to P35 billion in taxes, they have basis for that,” he said.

“You cannot regulate [the oil industry] today, because everywhere there’s a tank, there’s gasoline, there’s a pier, there are gas stations left and right,” the Petron official said.

“In short, we have opened up the floodgate which would be hard to stop,” he said.

Petron supports any government move that would regulate the industry, or continue with the Oil Deregulation Law. “I am in favor of whatever they want to do. We will play the game whatever game there is in town,” he said.

Petron said in its first half report that smuggling and illegal trading, like bote-bote (referring to bottled diesel and gasoline sold on sidewalks), retailing, and illegal refilling remains a concern for the country’s largest refiner.

“These illegal practices have resulted in unfair competition among players,” Petron said.

Petron also wants the Supreme Court to keep the Manila City Regional Trial Court from reviewing the books of Petron, Pilipinas Shell Petroleum Corp. and Chevron Philippines.

Manila RTC Judge Pampilo in April granted the motion of the Social Justice Society to open and examine books of the oil companies, and ordered the Commission on Audit, Bureau of Internal Revenue and Bureau of Customs to examine cash disbursements, purchase orders, delivery receipts, sales invoices and other related documents on the purchases of petroleum products of Petron, Shell and Chevron from Jan. 23, 2002 to December 2003.

Petron lawyer Gener Asuncion said such an order is illegal, because the Department of Justice-Department of Energy Joint Task Force had already ruled that the three oil firms were not guilty of monopoly, cartelization and predatory pricing.

The SJS wanted an audit of the oil companies to see if they had been engaged in price fixing and controlling the market to the detriment of consumers. –Alena Mae S. Flores and Rey E. Requejo, Manila Standard Today