By Lenie Lectura - October 16, 2019
ENERGY Secretary Alfonso Cusi is
pushing for the revision of the oil deregulation law so his office can enforce
a proposed policy that seeks to unbundle fuel prices.
“We discussed that in the Cabinet
and proposed to review the oil deregulation law because we need to have more
transparency and really know how we price it.
“And I also issued a show-cause
order on the difference of the oil price between Baguio, for example, and in
Pangasinan or Manila. There is that price difference. I want that price
difference to be unbundled. If I cannot unbundle the whole of the price, I
want to unbundle the difference,” an irate Cusi said when asked for an update
on the DOE unbundling circular as well as the show-cause orders issued against
13 oil companies.
Cusi hopes to gain the support of
the lawmakers on this. “I believe that the Cabinet is with us because it
is the interest of the people that is at stake.”
The DOE has kept close watch of fuel
pricing since the September 14 drone attacks damaged key oil facilities in
Saudi Arabia, as the Philippines imports nearly all of its crude oil
requirements.
Section 14 of the Downstream Oil
Industry Deregulation Act of 1998 mandates the DOE to monitor and publish daily
international crude oil prices, as well as follow the movements of domestic oil
prices.
Unbundling
circular
The DOE unbundling circular requires
oil companies to unbundle their price adjustments. They should submit a report
to the DOE with a detailed breakdown of their import costs, tariffs, biofuel
costs, oil company take components, and other essential cost components that
contribute to the changes in retail prices.
Cusi said these enhancements would
provide the DOE and other relevant government agencies with data necessary to
formulate proactive and appropriate policy initiatives for the benefit of
consumers and the downstream oil industry.
Furthermore, the data provided will
support the DOE-DOJ (Department of Justice) task force investigations on
reported incidents of anti-competitive behavior.
Oil firms oppose this, however,
because, among others, they would have to reveal their so-called industry take
amid a deregulated environment. While the DOE is barred from implementing the
circular, the DOE’s only recourse for now is to recommend amendments to the oil
deregulation law.
DOE Undersecretary Felix William
Fuentebella said the oil firms also cited the same arguments in response to the
show-cause orders issued by the agency recently.
“Their initial reaction is carbon
copy of responses in the cases pending before the courts in relation to the
unbundling case. They cited reasons but not details, citing the oil
deregulation law. So, our legal team now is looking into the impact of
this in the unbundling case. How do we move forward?” said Fuentebella.
The show-cause orders were issued in
view of the apparent difference in the oil price rollback calculations between
the DOE and oil firms. Local oil companies reduced gasoline price by P1.45 per
liter, diesel by P0.60 per liter and kerosene by P1 per liter.
However, the DOE said the price
reduction for gasoline was short by 22 centavos per liter, while the rollback
for diesel was short by .06 centavos.
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