By Lenie Lectura - August 8, 2019
SENATE Energy Committee Chairman
Sherwin Gatchalian on Wednesday said he will file a resolution to review
the 21-year-old oil deregulation law, following an injunction order issued by a
local court against the Department of Energy (DOE) circular on the
unbundling of fuel prices.
“Its about time to revisit [the
law]. The promise of the oil deregulation law is more competition and that it
will lead to lower prices. We should find out if we have achieved those
now,”said Gatchalian, when asked to comment on the court order.
The Mandaluyong Regional Trial Court
(RTC) Branch 213 granted last August 5 Petron Corp.’s application for a
writ of preliminary injunction against DOE Circular 2019-05-0008 or the
“Revised Guidelines for the Monitoring of Prices on the Sale of Petroleum
Products by the Downstream Oil Industry in the Philippines.”
Among others, the circular requires
oil companies to unbundle their price adjustments.
They should submit a report to the
DOE with a 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.
However, three local courts issued a
Temporary Restraining Order. The Mandaluyong court, for one, granted
Petron’s TRO application on July 15 against the implementation of the circular.
In granting the preliminary
injunction, the court said it “again found clear and unmistakable right,
which the petitioner was able to establish through evidence, to the provisional
relief prayed for, to prevent the public respondent, the Secretary of the DOE,
from implementing and enforcing the assailed DC while this court hears the main
petition for Declaratory Relief so as not to render the judgment ineffectual.”
If the DOE circular is not
restrained, Petron, said the court, might not be able to comply with its
requirements. “The first of which is the submission of the weekly reports. At
the same time, the petitioner might be placed at risk of losing its trade
secrets and incur irreparable injury by disclosing such information to DOE.”
In so doing, Petron said it may be
subjected to criminal prosecution and the administrative penalties cited in the
circular for noncompliance with the same.
Gatchalian said he will file the
resolution within the month. He said the review is meant to determine if the
DOE, as claimed by the oil firms, has crossed the line.
The oil companies said the DOE
circular contravenes the dynamics of a deregulated oil market. They
said the Downstream Oil Industry Deregulation Act of 1998 authorizes
the DOE to monitor both the international and domestic price movements of
petroleum products, as well as the compliance of businesses with national
standards.
“The DOE is doing this so that we
can have transparency to achieve energy security and to make sure nothing
disadvantageous to consumers is happening. The DOE should be able to know if
the oil firms are hoarding or not. or if the so-called industry take
is done beyond reasonable terms. We need to understand the dynamics,” said
Gatchalian.
Cusi:
We’ll find ways
For his part, Energy Secretary
Alfonso Cusi said Tuesday night that his office will “find legal ways” to carry
out its mandate.
“We have to consult our legal team
to determine the next step. We respect the court but that does not mean we will
stop finding ways [to boost transparency]. That’s the oil firms’ right. They
are exercising it, but I am not happy,” he said.
Another way to push for transparency
in fuel prices amid the court order is to push through with the plan of
Philippine National Oil Co. (PNOC) or its exploration arm (PNOC-
Exploration Corp.) to import fuel.
If and when successful, Cusi said
the government would have a better understanding on how oil companies are able
to price their petroleum products.
“We have never stopped,” said Cusi
referring to the importation plan. There are just some technical issues
involving some areas where the fuel would be sourced, if they can issue letters
of credit. But we are working on this,” said Cusi.
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