Unioil

July 20, 2009

Independent oil player Unioil Petroleum Philippines Incorporated (UPPI) stands pat on its earlier decision to implement big-time rollbacks on petroleum products sold by its retail outlets and service stations despite “criticism” from other players in the local oil industry.

Unioil President Kenneth Pundanera said the company will continue with its mandate of providing high-quality petroleum products at affordable prices to the public as he denied insinuation the company’s move was just to earn “pogi points” with the media and the consuming public.

“An independent oil company like Unioil can reduce prices of fuel products, particularly gasoline and still profit as a company,” Pundanera said.

Last week, Unioil slashed gasoline prices by P4.75 per liter, P3.50 for diesel and P1.50 for kerosene. Those cuts dwarfed the other oil firm’s P1.50 a liter rollback.

The company has started the “big-time” rollbacks last year setting a trend in the local oil industry and gaining the support of various sectors of society including members of Congress who lauded the move and called for additional rollbacks.

Responding to criticism, Pundanera said Unioil adjustment was based on its own suggested retail price (SRP), which oil firms set independently and that even if the SRP may differ because of market forces from actual price motorists see in retail stations, its prices still saw a major drop compared with the competition.

At the same time, he said other oil players can matched Unioil’s prices adding that competition is the essence of the country’s deregulated environment.

“Major oil companies and the other independent player can match and actually matched this price in the areas where Unioil operates. Price competition still exists in the oil industry and we should encourage more of this,” he said.

Pundanera also bewailed the fact that “real issues” were not discussed during an industry meeting organized by the Department of Energy (DOE) last Friday attended by executives of the country’s petroleum companies.

“Unfortunately, the DOE failed to thresh out during the meeting the following realities affecting the local oil industry which are detrimental to the public in general,” he said.

Among the issues he cited are the: Price matching by the other players, especially the major ones, are purposely limited to areas where Unioil has dealer stations and that outside of Metro Manila, other oil companies continue to impose a higher pump price and rake in profits.

During the industry meeting, Flying V Chief Executive Officer, Chito Villavicencio exposed the alleged “predatory pricing” policy of some oil companies wherein price of diesel products is dropped to stifle competition to the detriment of the small players, while maintaining high prices and lucrative profits for gasoline, particularly in areas where the independent players have no substantial presence.

Pundanera noted that this clearly goes against the Oil Deregulation Law which aims to foster greater competition among oil players and provide the public with products at affordable prices.

Pundanera said ganging up on Unioil’s implementation of a big-time rollback will send the wrong message to the public that a small oil player like Unioil can expect no support and will be even be accused of misleading the public.

“The message implanted on the public’s eye are: a small player which lowers its price, will not find favor from the big ones and others, and will be accused of various things. On the other hand, the government will pay lip service with words of encouragement, but throw it in the pit of hostility from the government itself and competitor companies,” he said.

He further stressed that this would only result to the usual modest price adjustments, whether upward or downward, being the model for oil companies.

“After all in a deregulated environment, what can the government do?? What can the consuming public do?? Is this the message that we want to happen?, he added. by LEAH FLOR

Prepared by:

Ms. Leah C. Flor

Corporate Communications Officer

email: media@unioil.com

website www.unioil.com