BAGUIO CITY – Energy department officials claimed the government is helpless in reducing the prevailing pump prices of oil products in the city because of the price war among players in the deregulated oil industry.
During the inquiry called by the City Council to find ways of reducing the current high cost of fuel in the city, officials from the central and Luzon field offices of the energy department said one of the factors in the high fuel prices in the city is the alleged transport, holding and other incidental costs incurred by the dealers in bringing the supply from San Fernando City, La Union up to the city.
For their part, local gas dealers claimed that they could not just reduce their prevailing oil prices because it is reportedly being dictated by their mother companies based in Manila and that the income they derive from their operations are already fixed.
Earlier, the City Council invited the energy department officials, local gas dealers and their counterparts in Metro Manila to shed light on why the oil prices in the city are much higher compared to the oil prices in the lowlands by at least P4 to P5 per liter when the distance from their depots in La Union to the city is fixed at over 67 kilometers.
According to the concerned energy officials, the role of the energy department is to look into the quality and quantity of the oil products and that the pricing of the products is left to the discretion of the oil players because the country’s oil industry is deregulated.
The local legislative body decided to approve a resolution to be sent to the mother companies of the oil players to lower the prices of oil in the city to make their prices competitive and avoid making the people of Baguio suffer from high prices when they can offer much lower prices like in the lowlands.
The council also requested the Philippine Competition Commission (PCC) to investigate the alleged collusion among the players of the oil industry to maintain high oil prices that rake in a huge income for them.
On the other hand, energy officials encouraged the local government to invite more oil players to set up business in the city to contribute to lowering high prices thus helping stabilize the city’s business climate.
On their part, representatives of transport groups in Baguio and Benguet claim their income from their daily operations are continuously declining because of the weekly adjustments in oil prices coupled with the significant difference in the oil prices in the city and the lowlands, thus, the need for the local government and concerned government agencies to find the appropriate solutions in helping lower the prices of oil in the city for the benefit of the motorists and the general public.
Except for saying that the difference in the oil prices in the city and the lowlands is due to the prevailing transport, handling, and incidental expenses, energy officials said the local government should look into the transport, handling and incidental expenses of local gasoline dealers to determine if these expenses are overcharged.
By Dexter A. See