“While it is complicated, we need to understand that oil is now primarily traded in the international futures markets… The spiraling of prices is mainly dictated by buyers and traders who gamble on the future price of oil in the name of superprofit-taking.” – Gabriela Women’s Party Rep. Emmi De Jesus
By MARYA SALAMAT
MANILA – Despite promising four months ago to look into the books of oil companies, the Aquino government has yet to start a probe into public allegations that oil companies have been overpricing their products. In fact, up to now, just like the biggest politicians continuing to evade disclosure of their Statement of Assets, Liabilities, and Net worth (SALN), the oil companies continue to evade the public demand to subject their books to public scrutiny. Worse, oil companies may likely just continue to hide their books from the public as the Energy Secretary Jose Rene Almendras recently announced that they can only monitor these oil companies; they cannot punish them or regulate them because of the Oil Deregulation Law.
“Why would the Aquino government conduct an investigation, as promised, if that is how they view things?” asked George San Mateo, national president of Piston.
At the women’s rally in front of the head office of Shell Philippines recently, Lana Linaban, secretary-general of Gabriela, reiterated that “The public remains doubtful of whether oil companies, especially the Big Three, are reporting their true income.” The women’s group trooped to the Shell head office after hearing about the oil company’s refusal to comply with the Regional Trial Court decision ordering it to show its books. Shell is appealing the order. Gabriela said the Shell Philippines position “only strengthens the public’s belief that they are indeed hiding something.”
Investigate the oil companies
Even as the Aquino government has been dead set on investigating the alleged wealth of Supreme Court Justice Renato Corona, it should also be eager to investigate the oil companies’ practice of replacement cost pricing, which allows them to increase prices even if the supply available on the market is still part of an inventory based on old oil prices, Linaban said.
In Congress, Gabriela Women’s Party Rep. Emmi de Jesus belied the usual excuses for inaction on oil price hikes such as the one aired this week by Energy Secretary Almendras about “market forces” being out of government’s control.
The price of oil is no longer dictated by the simple law of supply and demand, said Rep. de Jesus. “While it is complicated, we need to understand that oil is now primarily traded in the international futures markets… The spiraling of prices is mainly dictated by buyers and traders who gamble on the future price of oil in the name of superprofit-taking,” Rep. de Jesus explained.
Given the repeatedly exposed fallacy of “free market,” and in the light of the fact that the biggest oil companies who have been profitably operating in the Philippines for years now are just subsidiaries of the global oil majors involved not only in high-stakes oil price speculation and gambling but also in transfer pricing from subsidiaries to their mother unit, the need to closely regulate their business practices in the Philippines is not only crucial but obviously the responsibility, too, of the government, critics have said for years.
“The oil industry, as an industry vital to the public, should be subject to regulation by the government to protect public welfare,” Rep. de Jesus said. She added that while they are pushing Congress to repeal the oil deregulation law, they are also urging the Aquino government, through the Department of Energy, “to scrutinize the pricing practices of oil companies and ensure that the public’s interest comes first.”