Bayan computed the amount of overpricing by analyzing the monthly movement of Dubai crude and the US dollar – peso exchange rate and their combined impact on pump prices. The results were then compared with the actual price changes as monitored by the DOE.
The extra profits were computed using the latest available (i.e. first half of 2008) figures on local oil demand of around 286.6 thousand barrels per day (MBD) and the market share of each player. As of first half 2008, Petron controls almost 39 percent of the market, followed by Shell, 30 percent; Chevron, 14 percent; and Total, 4 percent. The rest of the market, 12.8 percent, is divided among the smaller oil players.
Furthermore, the overpricing and profiteering belie claims of losses by oil companies such as Petron’s reported P3.9-billion ($87,699,572 at the 2007 average exchange rate of $1=P44.47) net loss last year due to “extreme volatility” of global oil prices. The commanding position that Petron enjoys in the local market and the automatic price adjustments under the Oil Deregulation Law allow it to squeeze billions of profits from hapless consumers.
But are Malacañang and its allies in Congress willing to pass a law, or amend RA 8479, that will allow aggressive government intervention against the abuses of the oil industry? Consider that the national government is collecting an additional P39.48 million ($814,020 at the current exchange rate of $1=P48.5) everyday in value added tax (VAT) imposed on overpriced oil products.
Such amount is on top of Malacañang’s regular collections from the 12 percent VAT on oil, which the Department of Finance (DOF) described as the “biggest tax measure since the birth of the republic”. Why will government kill its own milking cow? Obviously, the additional VAT collections of government from overpriced oil make it disinterested in calls to regulate the industry and repeal the Oil Deregulation Law.
The oil companies and Malacañang together squeeze about P328.98 million (($6,783,092) in unjust collections everyday from the Filipino consumers. This brazen act of exploitation is downright condemnable, especially today that millions of workers face unprecedented job scarcity and poverty.
The Oil Deregulation Law should be repealed to ensure reasonable pump prices. The VAT on oil must be cancelled to immediately bring down the prices of petroleum products. These urgent measures can go a long way in easing the impact of the global financial and economic crisis on ordinary Filipino consumers.(Bulatlat.com)
