January 6, 2019 | 10:36 pm
THE Department of
Energy (DoE) hopes to issue by the first quarter a circular that will require
oil companies to submit a breakdown of the costs that go into the pricing of
petroleum products, including the so-called “industry take” that discloses
their mark ups.
In a draft circular,
the DoE said it will also impose a penalty on those that fail to comply with
the provisions of the circular, which include a timely announcement of oil
price adjustments.
Rino E. Abad, director
of the DoE’s Oil Industry Management Bureau (OIMB), told reporters last week
that the agency would schedule a second public consultation to discuss the
draft circular.
“So we will really do
this process within the first quarter,” he said. “Lahat naman ng items
(All the items) there will be debated thus the second public consultation.”
Mr. Abad said the
proposed circular has eight major components. He said the DoE had obtained the
consensus of the oil companies on seven of them.
“What we are discussing
is only industry take,” he said.
He said industry take
is a contentious issue for the companies as this covers their profit margin and
operational costs.
Based on the draft
circular, the oil firms are required to “strictly comply with the submission of
the formal notice of price adjustments per liter for liquid fuels and per
kilogram for LPG (liquefied petroleum gas).”
The submissions should
contain the computation and the corresponding explanation of the unbundled cost
items of all products subject for sale.
The required
computation covers the price movement for both the international content and
the local content of the fuel products. International content covers the
product cost, freight cost, insurance and foreign exchange rate. Local content
should enumerate taxes, biofuel cost and the industry take.
The fuel products
included in the circular are gasoline, automotive and industrial diesel,
kerosene, jet fuel, bunker fuel oil, and household and automotive LPG.
The DoE may require
retail outlets to submit to the OIMB an unbundled computation with
corresponding explanation of the retailers’ price of all petroleum products
sold in a specified period.
The draft circular also
calls for oil companies to notify the DoE not later than 3:00 p.m. of every
Monday of the week for any price adjustment — increase, decrease or no
adjustment — and prior to any public announcement and implementation.
For LPG, they are to
notify the department not later than the end of every month for any price
adjustment before any public announcement and implementation.
“For the purpose of
establishing uniformity in the timing of price adjustment across the whole
industry thereby avoiding any confusion among the stakeholders and consumers,
the price adjustment for liquid fuel shall be implemented beginning every
Tuesday of the week, and applicable for the whole week (from Tuesday to the
next Monday) and for LPG, beginning every first day of the month and applicable
for the whole month,” the proposed circular states. — Victor V. Saulon
No comments:
Post a Comment