T he oil and gas industry seems to have become the whipping boy of choice these days. It’s not just environmentalists this time, but the Philippines government and a handful of price activists.
Last week, the Philippines Department of Justice subpoenaed executives of Petron Corp., Chevron Philippines Inc., and Pilipinas Shell Petroleum following a complaint that they violated the Oil Deregulation Law.
The subpoenas followed a complaint filed by Cebu Gov. Gwendolyn Garcia against the so-called ‘Big Three’ for imposing higher oil prices in her province than in Metro Manila and other areas.
In an interview, Garcia said her office found by “mere comparison” that fuel prices in Cebu are 5-8 pesos higher than those of Metro Manila and Mindanao.
She said the oil firms claimed that prices of their petroleum products are higher in Cebu because of the costs for transportation of their fuel to the provinces—a point she did not accept.
Dubious distinction
“We are getting the dubious distinction of having the highest prices of fuel in this entire country. These clear, inexplicable price discrepancies have affected business, transportation, and everyone in Cebu,” Garcia said.
She is not alone in seeking to punish the three oil companies. Indeed, her complaint came just days after another group claimed that the three companies are overpricing.
According to a group called Bagong Alyansang Makabayan (Bayan), Petron, Shell, and Chevron are earning nearly 164 million pesos a day from selling allegedly overpriced petroleum products.
Based on its estimates, Bayan said all petroleum products on the average were overpriced by 5.11 pesos/l.
“Petron is earning 76.64 million pesos every day from overpriced oil. Shell, on the other hand, is earning 59.21 million pesos daily and Chevron, 27.92 million pesos,” Bayan said.
Protest rally
The group made the allegation as its members held a protest rally in front of Shell’s main office in Makati City to condemn alleged abuses of oil companies and to press for the repeal of—guess what?—the Oil Deregulation Law.
According to the group, the Oil Deregulation Law did not dismantle the oil cartel but even made it stronger because the important regulatory functions of government, such as control on price adjustments, were taken away.
“Additional powers given to the Department of Energy, for instance, will not stop the abuses of the oil companies as long as the policy framework is to let so-called market forces set the fair price of petroleum products,” it added.
However, these complaints coincided with a point made by Energy Secretary Angelo Reyes, who said there is a noted upward movement in oil prices abroad..
No one seemed to question the minister’s observation. So, why castigate the so-called ‘Big Three’ for a problem outside of their control?