Thursday , June 21, 2018

Baguio lawmaker sets inquiry on gas prices

BAGUIO City Representative Mark Go has initiated talks on the disparity and overpricing of fuel prices in Northern Luzon citing control of the companies in pricing all over the country.

“If you look at oil companies 60-70 percent is still controlled by the big three.”

A congressional inquiry has been started and is set to continue November 12 compelling Shell, Petron and Caltex to appear in a bid to shed light in prices of oil in the country.

Go said Petron was the lone company to appear before the congress during the last hearing but assured the other two companies will be present to shed light on issues.

In his Bill, Go said “there is a prevailing disparity between the pump prices of fuel in the areas of Northern Luzon particularly in the provinces of La Union and Baguio City which is in fact questionable. The average gasoline prices for Northern Luzon area is now P44.00 per liter. In contrast, gasoline prices in Baguio City remain high by as much as P5.00 to P13.00 per liter since November last year.”

Go said oil prices in Baguio still remains at P53.80 per liter compared to the pump prices in Rosario, La Union with P42.10 with only approximately 60 kilometers distance from the soul of fuel which is Poro Point, San Fernando, La Union.

“Consumers in Northern Luzon areas deserve a full explanation on this matter to shed light on the situation as to the real formula in computing and determining fuel prices, which is an affront to the right of the consumers to a fair and reasonable access to oil products.”

Studies made by Go showed on February 28, most oil companies implemented a P0.40/liter decrease in gasoline; diesel and kerosene increased by P0.35 and P0.30 a liter, but pump prices remained at high levels in Baguio City.

In a letter, Petron claimed that significant price differences are noted even between adjacent areas primarily driven by the number of competing retail outlets and that the level of discounting is so big that it merits further investigation. Petron further explained that La Union is one of the areas monitored to having substantially low prices, creating distortion in the market and forcing oil players to match prices to protect the market share in the area.

Chevron explained likewise they only determine the wholesale price it sells to its retailers, which then enables their retailers to set whatever price they deem as appropriate to their local area. The same stated that it is ultimately the retailers’ decision as to what constitutes competitive pump prices in their areas.

Go said oil price adjustment which may have been beneficial to the consumers, yet, the explanations given by oil companies raised more questions as it only exposes the fact that under current pricing regime, the pump prices are apparently subject to manipulation by the market players that should be monitored by the government.

Another congressman filed a similar Bill seeking explanations on why prices of gas are cheaper in Mindanao than the Manila area.