The oil companies and Malacañang together squeeze about P328.98 million ($6,783,092 at the current exchange rate of $1=P48.50) in unjust collections everyday from Filipino consumers. This brazen act of exploitation is downright condemnable, especially today that millions of workers face unprecedented job scarcity and poverty.
BY ARNOLD PADILLA
Pump prices continued its downtrend last week, with three rounds of rollbacks announced by the oil firms. On Monday, the so-called Big Three (Petron Corporation, Pilipinas Shell, and Chevron Philippines) slashed the price of their diesel and kerosene by P1 ($0.02) per liter and gasoline by 50 ($0.01) centavos. It was followed by two rounds of price cuts in liquefied petroleum gas (LPG) by members of the LPG Marketers’ Association (LPGMA) on Wednesday and Friday, which brought down the price of an 11-kilogram (kg) cylinder tank by a total of P22 ($0.45). It matched the earlier rollback in LPG prices by the major oil players.
The reductions have come at a time when public officials have all but admitted that Republic Act (RA) 8479 or the Oil Deregulation Law have been ineffective in curbing manipulations in the industry. Under public pressure to get tough on abusive oil companies, Secretary Angelo Reyes of the Department of Energy (DOE) said that while the government’s role is to protect public interest, it will “have to follow what the law dictates”. And the law (i.e., RA 8479), Reyes added rather candidly, does not say that government takes “more aggressive action versus the oil companies”.
But with the recent price cuts, proponents of deregulation will surely argue that there is no need for such state intervention. Market forces such as competition will supposedly impose discipline on the oil companies. The problem is despite these rollbacks, the unfortunate consumers are still burdened with overpriced petroleum and the profiteering acts of oil companies, especially the major players.
Due to overpricing, oil companies in the country are earning extra profits of around P289.51 million ($5,969,278) daily, according to the latest estimates of the multisectoral group Bagong Alyansang Makabayan (Bayan). Petron Corporation accounted for the lion’s share of the daily extra profits cornering an estimated P112.04 million ($2,310,103); followed by Pilipinas Shell, P86.56 million ($1,784,742); Chevron Philippines, P40.82 million ($841,649); and Total Philippines, P13.03 million ($268,659). Other oil players posted an estimated collective share of P37.06 million ($764,123).
The huge amounts of extra profits that oil companies collect from overpricing make the series of price cuts that they have implemented in the past two weeks meaningless. The price rollbacks are much smaller than what oil firms should reflect in pump stations to offset their overpricing. Bayan earlier said that as of mid-February, oil products in the country remain overpriced. Diesel is overpriced by around P2.94 ($0.06 at the February exchange rate of $1=P47.58) per liter; kerosene, P6.42 ($0.13); unleaded gasoline, P2.31 ($0.048); and 11-kg LPG cylinder, P125.35 ($2.63).