DOE should fully exercise oversight powers over oil firms lawmakers
DOE should fully exercise oversight powers over oil firms lawmakers
By Paolo Romero
The Philippine Star
Updated November 22, 2010 12:00 AM
MANILA, Philippines - Lawmakers yesterday urged the Department of Energy (DOE) to fully exercise its oversight powers on the country’s oil companies following the latest round of fuel price increases.
The lawmakers said the spate of fuel price increases by oil firms on claims to recover losses is inconsistent with the announcement of one big industry player that they posted a 59 percent increase in profits in just nine months this year.
Davao City Rep. Karlo Nograles noted that since October, oil companies have been increasing their pump prices at an average of 25 to 50 centavos per liter.
Several days ago, oil firms announced another round of price increase of around P1.50 to P2 per liter because of reported increases in the price of world crude.
While oil firms are claiming the increase in prices is due to higher demand for oil as winter sets in, Nograles said they continue to “ignore the fact the US dollar depreciated several times against the Philippine peso, which should offset the prevailing world market price.”
Ang Kasangga party-list Rep. Teodorico Haresco pointed out that Petron Corp. announced it posted a net income of P5.4 billion from January to September this year alone or an increase of 59 percent from P3.4 billion in the same period in 2009 due to higher sales.
“Which is which? Are they really absorbing losses and that’s why they are increasing oil prices or are they raking in profits? These oil companies are becoming too inconsistent. It appears they are already duping us,” Haresco said.
“This (fuel price increase) is unconscionable. These oil firms still have the gall to announce they are making so much profit... why (do) they continue to squeeze our people dry?” he said.
Nograles said the increases in pump prices “leave a bad taste in the mouth as we see these oil firms punishing the public with mind-boggling price increases while bragging to the media they have posted huge profits.”
Nograles and Haresco said they find it very inconsistent that oil companies are quick to jack up pump prices at the slightest hint of world market price adjustments or the slightest depreciation of the peso but are sluggish in bringing down prices if the situation reverses.
“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 firms,” Nograles said.
On the other hand, Eastern Samar Rep. Ben Evardone has filed a resolution seeking an inquiry into the country’s oil supply and frequent oil price increases.
Haresco, for his part, proposed that Congress should review the Oil Deregulation Law to strengthen its oversight provisions.
Haresco suggested the establishment of a multi-sectoral panel that would exercise the government’s monitoring power 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 the increase or decrease in oil prices. Factors like inventory, world market price and currency exchange are being cited but in a very inconsistent manner,” Haresco said.
He stressed the need for clear and indisputable criteria to assure the public that they are not being short-changed by the oil firms.
Evardone, for his part, chided Energy Secretary Rene Almendras for predicting that crude oil prices may breach the $100-per-barrel level.
“Mr. Almendras should stop acting like a commodity trader and oil speculator and should instead attend to our energy problems, including the high cost of electricity and petroleum products,” he said.
Evardone said the DOE chief has no reason to tell the public that crude prices would go up by about $20 to $100 per barrel.
“Is he conditioning the minds of Filipinos so that they will accept regimes of baseless oil price surges in the domestic market?” he asked.
“Right now, there is no evidence of oil prices breaking the $100-per-barrel mark,” he said.
Evardone revealed that based on his monitoring, crude prices have fluctuated between $81 and $88 per barrel.
“Questions of oversupply and excess inventories – and the lethargic economies of some traditional manufacturing countries – have been preventing any breakaway in global crude oil prices,” he said.
“That’s why I’m really puzzled (with) Mr. Almendras’ fear mongering. I do not know where he is coming from,” he said.
Evardone said the energy secretary’s forecast might embolden local oil companies to recklessly increase their pump prices.
He noted that last week’s increase in local prices of about P2 per liter on gasoline and more than P1 on diesel was the result of the jump in the cost of crude from about $85 to $88 per barrel.
“Imagine how much local distributors would jack up prices if the cost of crude soars to $100?” Evardone asked. – With Jess Diaz