P1.60 per liter overpricing in September: Oil Firms Continue to Profit in spite of Rollbacks

Government and the oil companies are using the series of oil price rollbacks to justify the deregulation policy and make it appear that the fundamentals of free market competition are working. However, the continued overpricing and profiteering of the oil firms amid easing global oil prices show that deregulation only exposed the Filipino consumers to more abuse.

BY IBON FOUNDATION

Posted by Bulatlat

Oil companies continued to amass billions of pesos in profiteering in spite of the string of rollbacks they implemented in September.

The ideal pump price reduction last month was P3.55 per liter but the oil firms implemented a total drop of only P1.95 for a net overpricing of P1.60. This translated to extra profits of around P2.47 billion for September alone.

Dubai crude posted a significant decline in price from $68.77 a barrel in August to $59.82 last month while the peso continued to rally against the US dollar from P51.33 to P50.36 during the same period.

The September overpricing brought the net overpricing for 2006 at P3.72 per liter. Meanwhile, cumulative profiteering from January to September is estimated at P5.81 billion. Of this amount, Petron took around P2.22 billion; Shell, P1.87 billion; Chevron, P917.55 billion; and the new players, P805.47 billion. (See Table)

Government and the oil companies are using the series of oil price rollbacks to justify the deregulation policy and make it appear that the fundamentals of free market competition are working. However, the continued overpricing and profiteering of the oil firms amid easing global oil prices show that deregulation only exposed the Filipino consumers to more abuse. There is no other recourse today but to repeal Republic Act No. 8479 or the Downstream Oil Industry Deregulation Act of 1998 and initiate important reforms, including price control, in the oil industry. Posted by Bulatlat