“It is well within the capacity of the Big Three oil companies to implement a significant rollback as their profits have steadily increased in recent years. It is simply revolting for us poor people to see the Big Three’s profits soar as oil prices rise unabated while we suffer from poverty and hunger.” – KMU
By MARYA SALAMAT
MANILA – Progressive transport and labor groups in the country are gearing up for a nationwide day of protest against the oil companies’ overpricing. This Monday, oil companies announced its long-awaited price rollbacks amid the downward trend in prices of oil products in the world market. But its rollbacks were less than the amount estimated by the energy department officials of P2 ($0.047), and far less than the “overpricing of P9” ($0.21)which independent analysts and various peoples’ organizations have previously asked the oil companies to slash.
In the budget hearing in Congress last week, the energy officials led by Energy Secretary Jose Rene Almendras estimated the needed roll back at P2. They told lawmakers they would investigate with the Department of Justice the oil companies who would not roll back their prices by P2.
But last Monday when most oil companies at last announced some price rollbacks, only the French newcomer Total Philippines rolled back their price by more than P2, bringing down their diesel by P2.35 ($0.055) per liter, while the price of their gasoline was lowered by just P1.50 ($0.035)per liter.
Of the Big Three, only Petron slashed by P2.50 ($0.059) the price per liter of their gasoline. Citing other “variables” affecting their prices, the Big Three including Petron lowered the prices of most of their products by less than P2, or just by P1.70 per liter of diesel and kerosene. Shell and Caltex lowered by P1.50 ($0.04) the price per liter of gasoline.
In the past, when the opposite is happening and prices of oil in the world market are rising instead of falling while more pesos are needed to purchase a dollar, an immediate and steep increase in oil prices in the Philippines usually ensues, noted George San Mateo, secretary-general of the transport group Piston.
“Immediate and steep increases when the world prices of oil increase and snail-paced and meager decreases when the world prices of oil decrease — this is where we can see the overpricing being implemented by the Big Three,” said Elmer “Bong” Labog, chairman of progressive labor center KMU.
Investigate oil companies or risk looking like liars and inutile
Bayan Muna Representative Teddy Casiño challenged the energy department to make good their threat against the oil companies. “They (DoE) should file a case against the oil companies at the justice department, or the Department of Energy would look like a liar or inutile,” said Casiño.
“It is clear that the Big Three oil companies do not fear or respect the Department of Energy to implement the meager rollback demanded by the agency,” said Labog. “The problem,” he said, “is that the DOE and the entire government do not have coercive powers over the Big Three.”
The labor group seriously doubts whether the DOE will make good its threat to investigate the Big Three’s profits. But even if the DOE does investigate, the labor group also doubts whether that will be productive. They said the Big Three “knows many magic tricks when it comes to declaring their profits.”
For the progressive labor and transport sector, the more justified amount of price rollback is four times higher than the amount announced by the energy department (and ignored by the Big Three). A consensus among different groups who had been studying oil prices is that the current oil prices are overpriced by at least P9 ($0.21).
Overpricing also explains why data from the Department of Energy show that the profits of the Big Three oil companies have increased by more than six times since 2001 as the per liter prices of petroleum products almost tripled during the same period, said the KMU.
Back in September 2009, then-socioeconomic planning adviser and now-Senator Ralph Recto said that petroleum products are overpriced by as much as P8.00 ($0.19).
When asked by Casiño during the budget hearing last week, Almendras said that every $3 drop in the price of oil per barrel in the world market should see a corresponding P1 decrease in prices per liter of petroleum products being sold locally. As crude prices have dropped by $7 a barrel since the week before the budget hearing, Almendras said the corresponding rollback should be at least P2 per liter.
It did not happen though, when the oil companies responded this Monday with their price cuts. Worse, the crude prices have reportedly dropped $16 by this time, and the value of the dollar has also dropped.
Quick to increase but slow to rollback
George San Mateo of Piston said even mere cents of overpricing would translate to billions of super-profits for the Big Three while for the working people and the transport workers, it means so much of needed but foregone earnings.
“It is well within the capacity of the Big Three oil companies to implement a significant rollback as their profits have steadily increased in recent years. It is simply revolting for us poor people to see the Big Three’s profits soar as oil prices rise unabated while we suffer from poverty and hunger,” Labog of KMU said.
Piston, KMU, Bayan and other progressive organizations in the country reiterated their demand for a “one-time big-time” rollback of P9 ($0.21) in prices of oil products. Different transport organizations in regions outside of Metro Manila where oil products are reportedly more overpriced have begun holding transport strikes and protest actions to oppose oil price hikes and to demand for oil price rollbacks in the last few months.
San Mateo told Bulatlat.com that the Aquino government also benefits from high oil prices, through the 12-percent EVAT (expanded valued-added tax) on oil products. As such, he said the high oil prices in the country are practically a result of a collusion between the government and the “oil cartel.”
As calls mount for the energy department and the Aquino government to take stronger action against the oil companies’ overpricing, Labog announced that a national day of protests is being organized for this month. “Given President Aquino’s apathy towards the plight of the Filipino workers and people, it is only our collective protests which can force him to act on the issue and give immediate relief to us by ordering a significant decrease in oil prices,” Labog explained.
To remove the “usual excuse” of Oil Deregulation Law rendering the government helpless in protecting the people from overpricing, PISTON and KMU urged the public to support their calls for scrapping the said law. “Junking the law is the first step to controlling oil prices in the country and punishing oil companies for overpricing and monopoly profiteering,” Labog explained.