Unbundling of fuel prices backed by local dads

BAGUIO CITY  – The City Council approved a resolution requesting Energy Secretary Alfonso Cusi to cause the issuance of a directive that will unbundle the rates for a greater accountability in the oil industry, as well as transparency for the consumers not only in the city but also the whole country.

The resolution authored by Councilors Benny Bomogao, Michael Lawana and Faustino Olowan states it has been noted for a period of time the unusual high prices of oil products in the city, the highest in fact for Northern Luzon, that went as high as more than P18 difference with prevailing oil prices in other cities and provinces.

The resolution also noted that in several fora, consultations and even legislative inquiries, no clear and satisfactory explanations were elicited from the local retailers of the different players, especially the ‘Big 3’companies, that are perceived to be allegedly dictating the prevailing oil prices in the city resulting in the huge price disparity between the prices of oil in the city and that outside the city.

Section 14 paragraph b of Republic Act 8479, otherwise known as the Oil Industry Deregulation Law, empowers the Energy Secretary to act on a report from any person of unreasonable rise in the prices of petroleum products and shall be immediately disposed of pursuant to existing rules and regulations provided for by law.

Further, Section 15 paragraph b in relation to the above provision empowers the Energy Secretary to require, by general or special orders, persons or entities engaged in a particularly activity of the industry, to answer specific questions in writing, furnishing to the Secretary such information as he may require as to the organization, business, conduct, practices, management, in relation to other corporations, partnerships, and individuals of the respective persons or entities filing such reports or answers. Such reports and answers shall be filed with the Secretary under oath and within such reasonable time as the Secretary may prescribed.

During a recent consultation with oil retailers in the city, energy officials reported that the industry take of local businessmen had been P8 compared to the industry take of their counterparts in the lowlands despite the fact that the transport cost of oil products from the lowlands to the city is P0.18 per liter.

Worst, local oil retailers passed on the blame to their mother companies which are allegedly dictating the oil prices charged to consumers when getting their supply from their respective oil terminals in San Fernando City, La Union, only 68.2 kilometers away.

Energy officials attributed the significant reduction in oil prices, at least P2 per litter of gasoline and at least P6 per liter for fuel, to the combined efforts of local officials led by Mayor Mauricio G. Domogan and the concerned sectors of the city, in bringing to the attention of the agency the alleged manipulation done by the local oil retailers in dictating the prevailing oil prices which are way above the supposed suggested retail prices of oil in their gas stations around the city.

By Dexter A. See


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