Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts
Volume 2, Number 39 November 3 - 9, 2002 Quezon City, Philippines
Drivers Call for Price Rollback as Oil Giants Reap Profits
media reported how the recent transport strike fizzled out but failed to analyze
the reasons behind the protest action. As a result, the continued profiteering
of oil companies becomes hidden in technical jargon and misleading statistics
fed by both government officials and oil executives.
DANILO ARAÑA ARAO
media had a field day exposing the failure of the nationwide transport strike
last Oct. 30 to paralyze traffic in key cities of the country. Government
officials were quoted as saying that the strike only lasted four hours and was
“hardly felt by commuters.”
Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide (PISTON, United
Association of Drivers and Operators Nationwide) organized the strike to call
for an oil price rollback. PISTON argues that the income of drivers is severely
affected by the successive oil price hikes.
from the Department of Energy (DoE) show that for the first nine months of 2002,
pump prices increased by P1.60 ($0.0301, based on an exchange rate of P53.075
per U.S. dollar) per liter on the average. It may be recalled that there was a
reported oil price hike of P0.38 ($0.0072) per liter in early October. This
translates to a cumulative increase since January 2002 of P1.98 ($0.0373) per
Raul Concepcion, head of the Consumer and Oil Price Watch, says that another
P0.22 ($0.0041) per liter increase is in the offing due to the fluctuation of
the peso-dollar exchange rate and the imminent U.S. war on Iraq that jacked up
prices of crude oil in the international market.
in 2001, 2002 offset by profiteering in 2000
price of Dubai crude was pegged at $18.48 per barrel in Jan. 2002. This
increased to $26.61 per barrel in Sept. 2002, a 44 percent increase from the
January level. As regards the peso-dollar exchange rate, the Jan. 2002 and Sept.
2002 levels were P51.39 and P52.07 per U.S. dollar, respectively.
the data since the year 2000, however, the losses of oil companies in 2001 and
the first nine months of 2002 due to fluctuations in Dubai crude prices and the
unstable exchange rate are greatly offset by the substantial profiteering in
2000. Given this, Bulatlat.com argued
for a rollback in oil prices amounting to P0.30 ($0.0056) per liter. [For more
details read “OPH in October: Oil Price Hocus-Pocus,” Bulatlat.com, 2 (34). URL https://www.bulatlat.com/news/2-34/2-34danny.html]
profits since 1991
from the Securities and Exchange Commission (SEC) show that except for 1997 and
2000, oil giants Petron Corporation, Pilipinas Shell and Caltex Philippines have
earned profits since 1991, ranging from P0.5 billion or $9.4206 million (Shell,
1992) to P7.5 billion or $141.3095 million (Petron, 1994).
From 1991 to 2001, Petron, Shell and Caltex earned a cumulative combined income of P41.4 billion ($780.0283 million). (See Table)
year, the big three oil companies made it to the country’s top 10 companies in
terms of consolidated sales. Shell was in third place with P96.1 billion ($1.8
billion) in sales, while Petron and Caltex landed fourth (P88.1 billion or $1.7
billion) and eighth (P58.3 billion or $1.1 billion), respectively
on media reports, Petron already earned a net income of P1.2 billion from
January to June 2002. This means that it has already equaled in just the first
half of this year the total net income last year.
the Arroyo administration tolerates the continued profiteering of oil companies
is not surprising. After all, it substantially earns from the specific taxes on
petroleum products which average P1.58 ($0.0298) per liter.
the assumption that Filipinos consume 60 million liters per day, the
administration earns P94.8 million ($1.7862 million) daily from specific taxes.
In one year, this translates to P34.6 billion ($651.9454 million).
specific tax for diesel, commonly used by jeepney drivers, is P1.65 ($0.0311)
per liter. A driver therefore who consumes 20 liters for his or her daily route
ends up giving P33 ($0.6218) to the administration in just one day. Assuming
that the driver works from Monday to Friday, he or she pays a specific tax
amounting to P726 ($13.6788) monthly (i.e., assuming a 22-day workmonth).
driver may not be aware of such payment since specific taxes are indirect taxes
included in the prices of commodities bought (in this case, petroleum products).
a situation makes the Arroyo administration tolerate the profiteering ways of
oil companies. After all, if the latter are happy, then the administration
becomes also happy, if not happier.
administration cannot afford to let the oil firms lose money since this may
compromise the collection of specific taxes. Indeed, the downstream oil industry
serves as a milking cow of the Arroyo administration.
is the reason why the administration is “soft” on rich oil companies but
“hard” on poor drivers, as may be gleaned from the pronouncement that those
who joined the recent nationwide transport strike will have their franchises
Poor people are now going through an oily ordeal, and a cursory look at the downstream oil industry leads one to realize the oily conspiracy between oil companies and the Arroyo administration. Bulatlat.com