Wednesday, April 20, 2005

Arroyo tells public: Buy Petron products

A DAY after a nationwide transport strike crippled public transport in key cities, President Gloria Macapagal-Arroyo urged the public to buy petroleum products from the quasi-government Petron Corp.

"We're calling on everybody to buy from Petron rather than from rival firms because this is a deregulated environment. It's demand and supply," the President said yesterday at a news conference in MalacaƱang.

Petron, which is 40-percent owned by the government and has a market share of 38 percent, has not raised its prices the past few weeks.

"We have been looking at crude prices and have observed a softening over the past 10 days. Because of this, we see no immediate need to increase prices. We will hold off any increase as long as we can," Petron public affairs manager Virginia Ruivivar said.

Over the weekend, private oil firms raised the prices of gasoline and diesel by 75 centavos a liter and the price of liquefied petroleum gas (LPG) by 75 centavos a kilogram.

Officials of oil firms may face two-year prison sentences if they refuse to explain to the Department of Energy (DoE) by 5 p.m. today why they raised fuel prices by 75 centavos a liter over the weekend despite dropping world oil prices.

Energy Undersecretary Peter Anthony Abaya said the DoE yesterday sent another letter to the oil firms, seeking an explanation for the price increases, as the first letter went unheeded.

He said Energy Secretary Raphael Lotilla had asked oil companies, through a letter sent Monday, to explain under oath their latest price increases, which came at a time when world prices had gone down by more than 10 percent from all-time highs.

Special attention, he said, was placed on the 75-centavo-a-liter price increase over the weekend as this digressed from the 50-centavo-a-liter pattern that the oil companies had been following for the past several weeks.

It was the seventh gasoline price hike since the beginning of the year, resulting in a cumulative increase of P3.85 a liter. For diesel, it was the eighth price increase, bringing the cumulative price hike to P4.05 a liter.

LPG prices have risen thrice, or by a total of P2.15 a kilogram, since January.

P32 a liter for gasoline

Data from the Department of Energy show that pump prices of unleaded gasoline now range from P30.65 to P32.08 a liter, while diesel is being retailed at between P25.70 and P27.65 a liter.

Prices of LPG now range from P356 to P420 for an 11-kilogram cylinder.

Several jeepney groups staged the strike to protest the series of oil price increases.

Responding to the strike, Transportation Secretary Leandro Mendoza, after meeting with transport leaders on Monday, said the government would likely grant the petition for a P2.50 increase in the minimum jeepney fare by the first week of May.

Second letter

Abaya said the second letter pointed out to the oil firms a provision in Republic Act No. 8479, or the Downstream Oil Industry Deregulation Act of 1998, which says that non-compliance with reportorial requirements or any order from the energy secretary was punishable by two years in prison and a fine of between P250,000 and P500,000.

Chapter 3, Section 12 of the Oil Deregulation Law enumerates requirements that oil firms have to comply with, including submission of any reportorial requirements, use of clean and safe (environment and worker-benign) technologies, response to any order of the energy secretary, and registration of any fuel additive with the DoE prior to its use as an additive.

"We ask that this request not be ignored," Abaya said.

Missing the point

The militant Bagong Alyansang Makabayan (Bayan) said the government missed the point of the successful transport strike that hit Metro Manila and other urban centers on Monday, saying the proposed fare hike will ultimately benefit the oil companies.

Bayan secretary general Renato Reyes Jr. said an increase in public transport fares would not be enough to cover the cost of maintaining a jeepney franchise because of the continued increase in oil prices.

"With oil prices still going up, the fare hike will simply go to the oil monopolies. The transport sector will still suffer (and) the commuters, even more," Reyes said in an interview.

He said the scrapping of the Oil Deregulation Law and the nationalization of the oil industry were the solutions to the crisis.

Special powers for Arroyo

In the House of Representatives, calls to repeal the Oil Deregulation Law yesterday received bipartisan support.

The congressional leaders also favored granting "special powers" to Ms Arroyo to deal with the looming oil crisis.

House Majority Leader Prospero Nograles joined the move led by Minority Leader Francis Escudero and militant party-list lawmakers to review the Oil Deregulation Law.

Escudero said the Oil Deregulation Law, which allows oil firms to raise prices without seeking government approval, should be reexamined to give government greater flexibility in setting fuel prices.

"We can't blame the government. But government should at the very least try to do something. They're raising the white flag already. We can't throw in the towel just yet," said Escudero.

Non-OPEC countries

Escudero suggested a new law that would require oil companies to buy from non-OPEC (Organization of Petroleum Exporting Countries) members such as Russia and China, which sell oil at a more "reasonable rate."

He also suggested that government stockpile oil reserves to be sold to local oil firms when the prices in the world market became too prohibitive.

Nograles said he was amenable to the proposal of Escudero for Congress to give additional powers to the executive to rein in oil prices.

He said Congress should return to the government the power to intervene in the pricing of oil as he noted that a deregulated regime had opened opportunities for abuse by the three big oil companies.

Acceptable option

The House majority leader said Pilipinas Shell Petroleum Corp., Caltex Philippines Inc. and Petron Corp. had been acting like a cartel.

"The purpose of legislating the oil deregulation law was to encourage all companies to offer more acceptable options to the consumers. But instead of protecting the consumers, the law has become a tool of aggression by these oil firms," Nograles said.

Party-list groups Bayan Muna, Gabriela and Anakpawis have been seeking the repeal of the Oil Deregulation Law since the 12th Congress.

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