THE Department of Energy (DOE) assured consumers of its move to require petroleum companies to unbundle their costs to disclose detail on how they arrived at their pump prices.
During the Baguio leg of the 'E-POWER MO' caravan series, DOE Undersecretary Felix William Fuentebella said the Department’s measure, through the issuance of a circular, requires oil companies to submit their unbundled prices.
"Unbundling will isolate the price increases caused by the higher taxes, commodity trading and the cost of doing business, among others," said Fuentebella.
With the measure, oil companies will be required to make a public announcement for any pump price adjustments while the DOE will continue validating whether the price movements are justified.
"Using the metaphor of a basketball game, we have to outline how energy users can play competitively following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the energy policies for an increased consumers’ power of choice, diversity in energy resources, energy resiliency, energy efficiency and conservation, and energy smart consumers," Fuentebella explained.
The DOE explained the disparity in fuel price between Poro point in La Union with that of Baguio City is based on the P25 international price import content, P7 excise tax, P6 value added tax amounting to P38 minus P60 while the remaining P22 is now identified as the industry take.
Another factor to be considered is that Baguio City consumes only one to two percent of the Northern Luzon demand for fuel distributed by re-sellers aside from not having its own depot, import terminal, and a refinery.
"The one thing good about the energy sector is that it is all about numbers, it is all about science, it is all about economics, so we are able to compute. And if there are any manipulation as in the economics, we are now able to check," Fuentebella added.
Following the additional effects on petroleum products with the implementation of TRAIN Law this year, Baguio City Congressman Marquez Go have passed on second reading a measure giving back to the Energy department powers to regulate the prices of fuel.
"We have given them an ultimatum for them to resolve the price disparity or else, we will be filing a law amending the oil deregulation law which will give these oil companies a maximum increase with the end in view that they will not have the opportunity to make unexplainable increases in the prices like what they are doing at present," Go said.