Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts
Volume 2, Number 31 September 8 - 14, 2002 Quezon City, Philippines
2000, oil firms overpriced their products by P2.64 per liter. These
substantially negate the underpricing in 2001 and the first eight months of 2002
which reached P2.11 per liter. The difference (P0.53 per liter) should be
reflected as a rollback in pump prices, if only to correct the injustice
committed two years ago.
DANILO ARAÑA ARAO
of increasing pump prices early this month, oil companies should have rolled
back petroleum products by as much as P0.53 per liter.
the continuous increase in Dubai crude prices from $18.43 in January to $25.24
in August, the reported under-recoveries of oil companies this year are more
than offset by their profiteering since January 2000.
computations show that for the year 2000, oil firms overpriced their products by
P2.64 per liter. These substantially negate the underpricing in 2001 and the
first eight months of 2002 which reached P2.11 per liter. The difference (P0.53
per liter) should be reflected as a rollback in pump prices, if only to correct
the injustice two years ago. (See Table 1)
the computation of estimated profiteering, Bulatlat.com used the industry rule
of thumb (ROT) for the years 2000, 2001 and 2002 to relate the fluctuations in
Dubai crude prices and exchange rate to the price adjustments made by oil
regards the rule of thumb for the year 2000, the Department of Energy (DoE)
estimated that there should be a P0.35 per liter oil price hike (or rollback)
for every $1 increase (or decrease) in Dubai crude prices. In addition, every
one-peso fluctuation in the peso per US dollar exchange rate should warrant a
P0.20 rollback (in the event of peso appreciation) or increase (in the event of
2001 and 2002 (first eight months only), Bulatlat.com computed the ROT at 42
centavos for every $1 increase or decrease in Dubai crude prices, and 19
centavos for every P1 appreciation or depreciation of the exchange rate.
rule of thumb is used as a benchmark for indicative prices of petroleum
products. Indicative prices refer to estimates of pump prices based on the
changes in Dubai crude prices and the peso per US dollar exchange rate at a
rule of thumb may be computed at a given time by making constant the variables
in the pricing formula and then alternately adding one dollar to the Dubai crude
prices and one peso to the exchange rate. Bulatlat.com's computation of the rule
of thumb from January to August 2002 may be seen in Table 2.
values for crude oil (Item A) and the peso-dollar exchange rate (Item D) are
based on their respective averages from January to August 2002. The 3% tariff on
crude oil is imposed as a result of Republic Act No. 8479 which deregulated the
downstream oil industry in 1998. The P1.58 per liter specific tax, on the other
hand, is due to Republic Act No. 8184 which restructured the taxes on petroleum
products. The 15% gross margin of oil companies and the 10% dealer's mark-up are
based on Petron, Shell and Caltex's claim that they only peg such a percentage
as gross margin and mark-up for dealers for every liter of petroleum product
that they sell.
Dubai crude was used as a benchmark because the local oil industry normally procures oil from the Middle East. Although not all industry players get crude directly from Dubai, no less than the DoE acknowledged that prices are not substantially different from Dubai's. Bulatlat.com