Oil firms, DOE slams Unioil’s “big-time” cut

Normally oblivious to public criticisms about pump prices, local players in the oil industry and Department of Energy appeared stung by a small player’s promotion of “big-time” rollbacks at the expense of its competitors.

In an industry meeting organized by the Energy department on Friday, executives from the country’s petroleum companies accused Unioil Petroleum Philippines Inc. of misleading the public with its recent cuts of P4.75 a liter in gasoline prices and P3.50 a liter cut for diesel. Those cuts dwarfed the other oil firms’ P1.50 a liter rollback.

Fernando Martinez, Eastern Petroleum Corp. president, said that Unioil lied to the public when it announced that it had adjusted its prices much lower than what other oil companies did. He added that Unioil merely compounded previous price cuts made by most oil firms—except Unioil.

“It’s unfair to everybody what you’re saying,” he said, referring to Unioil. “In reality, you have already matched your neighbor. It’s a lie, and lying is bad.”

Martinez also heads the Independent Philippine Petroleum Companies Association, a group composed of local oil firms that entered the industry following its deregulation more than a decade ago.

Selective rollback

Mark Quebral, Chevron (Caltex) Philippines Inc. manager for policy, government and public affairs, said that Unioil’s price adjustment was not reflected in all of its retail stations, which are fewer than 50 across the country.

“Our marketing group did note that in areas where we have Caltex stations and Unioil stations, adjustments by Unioil did not always go by that huge amount of P4.75 in some areas. I don’t think Unioil was moving uniformly everywhere,” he said.

The other two of the so-called Big 3 oil firms—Petron Corp. and Pilipinas Shell Petroleum Corp.—also weighed in on Unioil. And Shell even commissioned its own survey of actual pump prices.

Energy Secretary Angelo Reyes, who initially welcomed Unioil’s price cut, also joined the fray when he said that Unioil held back its price adjustments amid the ones being implemented by other oil firms only to come up with its own bigger price cut.

“In the meantime that the market was going down, they we’re not moving their suggested retail price, they we’re not adjusting it. They maintained it high,” he said.

Defending Unioil

Despite the criticisms, Unioil President Kenneth Pundanera said his company’s adjustment was based on its own suggested retail price, which oil firms set independently.

He added that while suggested retail prices may differ because of market forces from actual prices motorists see in fuel stations, when the company implemented its hefty roll backs for gasoline and diesel on July 13, its prices saw a significant drop compared with the competition.

Pundanera added that the Energy department’s findings, which Reyes cited, compared the market’s average suggested retail price to Unioil’s actual pump prices.

Government probe

The squabble has also attracted the Department of Justice. Undersecretary Jose Victor Salazar asked all the oil companies to submit necessary documents to look into possible “criminal violations.”

He added that while the department would look into alleged irregularities with Unioil’s price adjustment, “there’s also a possibility of cartelization among the other players” which kept them from effecting similar price cuts.

“If you look at the criminal aspect, the implication of this and the possible criminal violation that is crucial considering that you can still profit—then there is possibly a case of unreasonable pricing of oil, which is a criminal offense under the law,” Salazar said. –Euan Paulo C. Añonuevo, Reporter, Manila Times