Published January 24, 2018, 10:00 PM
By Myrna M. Velasco
After figuratively getting whacked
on the head in a Senate hearing last week, Department of Energy (DOE) officials
are still on “struggle mode” on their analysis of petroleum product inventories
as well as on the examination of data submissions of the oil companies.
The latest faux pas of the DOE
officials in this week’s meeting with the oil companies had been their manifest
unfamiliarity of the nature of the downstream oil business – including that of
gains and losses incurred on product costing through the chain – from crude
products’ shipments to their refining; and up to the products’ passage through
terminals and depots before they are retailed to customers at the pumps.
For instance, with oil refiners –
when their crude shipments arrive, it may still take days before these could be
processed at the refinery; and even more days after refining, that the finished
products would have to travel through complex paths of marketing depots and
terminals before they reach the retail pumps. Hence, the price of which the
product shipment had been originally been sourced at, will already change at
the time it reaches the gas station level.
The oil firms can just wish that the
DOE officials would have ‘deep understanding’ of the industry’s complexities so
they can thoroughly analyze and assess the oil inventories.
“How can they (DOE officials) even
start analyzing data on inventories if they don’t know what are the basic facts
they should be looking at,” an oil industry player has asserted.
The DOE has committed to Senate
Committee on Energy Chairman Sherwin T. Gatchalian that analysis of the oil
firms’ inventories and validation of costs’ pass-on at the gas pumps be
completed by the end of the month.
To Energy Secretary Alfonso G.
Cusi’s credit, he is reportedly cracking the whip on the concerned energy
officials so they can present a thorough report and extensive validation
whether or not the oil industry players have committed abuses in their enforcement
of price increases relative to the implementation of excise taxes under the Tax
Reform for Acceleration and Inclusion (TRAIN) Act.
The old stocks of the oil companies
were not supposed to have been covered by the newly enforced TRAIN taxes, thus,
the DOE will need to undertake thorough validation of their inventory numbers
and costs’ pass-on to consumers
“The energy secretary wants
everything unbundled and thoroughly explained, and we are also being pressed to
work on a strict deadline,” an energy official privy to the discussion has
indicated.
The energy official further pleaded
for “public tolerance and understanding since this is the first time that we
are doing this.”
On Wednesday (January 24), the
energy department deployed teams anew to oil firm retail networks “to
validate imposition of excise tax on liquefied petroleum gas (LPG) products.”
The department noted that there had been “two
DOE teams who will go around the stretch of Tomas Morato Avenue, Timog Avenue
and E. Rodriguez Avenue fuel stations (in Quezon City) to inspect
implementation of excise tax and prices of their LPG products.”
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