Published
By Myrna M. Velasco
On the cost unbundling
proposal for the deregulated petroleum industry, the Department of Energy (DOE)
is fleshing out the various pricing components being passed on to consumers at
the pumps – and with particular focus on what the agency unearthed as 10 to
20-percent take of the industry players.
Based on the initial
findings of the DOE, Undersecretary Felix William B. Fuentebella indicated that
the margins of the oil companies range from 10 to 20-percent; but he said those
with higher take could not just be thrown with allegations of “profiteering” or
“excessive pricing” because intense competition is really manifest in the
industry.
When asked by the media
if the department has uncovered any acts of excessive margins or profiteering,
the energy official qualified “that’s hard to say because the industry is
deregulated and there’s really intense pricing competition going on.”
Fuentebella noted the intent of the fuel price unbundling is not to demonize
the industry, but that policy proposition is rooted more on the desire of the
department to apprise the consumers as to what they are really paying for in
that liter of gasoline or diesel being purchased.
The energy department
emphasized that if compared to the regulated power firms in the electricity
sector – the overall take of the distribution utilities had been at the scale
of 30 to 35-percent; and their net margin is at 10 to 15-percent as anchored on
their regulator-approved weighted average cost of capital or WACC, which is
employed as the main determinant of their profitability.
For fuel products, the
cost components that will be itemized shall cover importation costs of the
commodities (crude for refiners or diesel and gasoline finished products for
the independent players); logistics costs; biofuels component and taxes, among
others.
Fuentebella said the “fuel cost unbundling policy” will definitely be
implemented by the department, although he admitted that opposition is still
fierce from segments of industry players.
The policy enforcement,
he added, is an intense “subject of debate” among various stakeholders, but the
energy official said the department will have to take up the cudgels for the
consumers’ rights to be informed as well as to empower them on their choices.
“The way for us really
is affording the consumers that power of choice – that they would be able to
compare prices and know the extent of services that the oil companies could
offer them – and one way to do that is giving them enough information,”
Fuentebella expounded.
On segregating the cost
components, the energy official opined that consumers in the process could be
apprised with the developments affecting pump prices – including the swing of
prices in the world market; plus the price movement also of biofuels – like the
coco methyl ester or ethanol that are being blended into diesel and gasoline
products, respectively.
Fuentebella is anticipating that the Circular mandating fuel costs itemization
will likely be firmed up and be subsequently signed by Energy Secretary Alfonso
G. Cusi by the end of the month until early part of April.
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