BY ARNOLD PADILLA
MANILA –Oil firms, in particular the so-called Big Three, are again on the defensive. A trial court judge has ordered them to open their books of account for scrutiny. The order is meant to determine if the three oil firms operate as a cartel. Meanwhile, the Arroyo administration’s chief economist has again accused the oil companies of overpricing.
To be sure, public attention on oil has been unprecedented since global oil prices breached the $100 per barrel mark last year. Mainstream media has closely followed oil price trends and there is worsening public distrust on the oil firms. Perception of overpricing has increased and questions on the Oil Deregulation Law have persisted. The incompetence of Energy Secretary Angelo Reyes has also been repeatedly raised.
These issues have been amplified by a court’s decision asking the oil companies to open their books amid persistent allegations of overpricing. And while the issues of overpricing and cartel remain unresolved, oil firms again increased pump prices by P1.50 (0.03 at the May 16, 2009 exchange rate of $1=P47.64) per liter this week. In the coming days, more oil price hikes are imminent, they warned. A new round in the long-running battle between consumers and abusive oil firms has begun.
Opening the books
This time, a new factor that could be favorable to consumers has come into play. On April 27, Judge Silvino Pampilo Jr. of the Manila Regional Trial Court Branch 26 directed government agencies to examine the books of the Big Three. The Commission on Audit (COA), Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) were tasked to do the investigation.
It is interesting to note that in the past, oil players were receptive to calls for an independent scrutiny of their books. Last December, amid questions on its small and delayed price cuts, Petron Corp. dared members of Congress to look into its financial position. In a statement, the biggest oil firm in the country said:
“If lawmakers actually look into our financial position, they will find that we are in a very difficult situation… We have always supported initiatives to ensure transparency in oil pricing. As a publicly listed company, our financial statements can be scrutinized by anyone”.
But now, Petron, Shell and Chevron are singing a different tune. In their separate motions for reconsideration, they argued that the court’s order to open their books for auditing does not have factual or legal basis. Chevron even dismissed the order of Judge Pampilo as “nothing more than media interest.”
Why did the Big Three suddenly become averse to the idea of opening their books? The reason is obvious. Past statements made by oil firms and in many instances, by Sec. Reyes on “opening the books” were simply publicity, aimed to assuage public outrage. They did not intend to give a comprehensive and honest scrutiny of the books of account of the oil companies. As noted by Pampilo in his ruling:
“In recent times, the Department of Energy has expressed through the mass media that they will open and examine the books of account of the ‘Big Three’. For reasons unknown to many, the books have remained unopened and unexamined, and the puzzle remains unsolved”.