Oil Giants Can Control Surge in World
Prices
By IBON Foundation
Aug. 6, 2004
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Global oil prices are
reaching record highs not because of unmanageable factors. In reality,
giant transnational oil corporations that exert monopoly control over the
global oil industry have the capacity to bring down oil prices.
Super companies like
Exxon Mobil (US), Chevron Texaco (US), Royal Dutch Shell
(Britain-Netherlands), British Petroleum (Britain), Total (France), and
Conoco Phillips (US) intensely dominate and control the upstream to the
downstream levels of the global oil industry, making them invulnerable to
external factors that may affect prices. Such position allows them to
dictate the price with which they want to sell their products.
Dubai crude, for
instance, is overpriced by US$18-20 per barrel, which represent windfall
profits for the super companies that control oil. Theoretically thus world
crude prices can be slashed by about the said amount, substantially
bringing down pump prices in downstream markets.
But with world crude
prices showing no signs of stabilizing, the Arroyo administration should
do more than delaying the implementation of the petroleum tax hike to
counter the profiteering of the oil giants. Government must now design and
at once implement a set of contingency measures to soften the impact of
impending drastic increases in oil prices on ordinary consumers as well as
the national economy.
IBON urges the Arroyo
administration to consider the following actions:
1. Suspend the
implementation of the oil deregulation law.
2. Institute a ‘price
control mechanism’ on socially sensitive petroleum products like diesel,
gasoline, and liquefied petroleum gas (LPG).
3. Require the oil
companies to disclose their inventory to determine how much oil they have
and at what price did they purchase it.
The suspension of the
oil deregulation law gives an opportunity for policy makers and economic
managers to rethink the deregulation policy and to look for a viable
alternative. Deregulation merely allowed huge foreign oil companies and
their local subsidiaries (like Shell, Caltex, and Petron) to further
monopolize the Philippine oil market and impose unreasonable prices.
Bulatlat
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