Tuesday, July 22, 2008 Eddiegul wants Congress to check whether oil price increases are justifiable
REP. Eduardo Gullas (Cebu, 1st district) is calling for a congressional inquiry on oil firms, following his expose that the two major oil refiners – Shell and Petron - have raked in P70 billion in combined net profits since the passage of the Downstream Oil Deregulation Law in 1998.
“My resolution that calls for an inquiry will be filed anytime today,” Gullas (Cebu, 1st district) told Sun.Star Cebu yesterday.
Part of the investigation is to check the record books of oil firms to find out whether the weekly increases of fuel prices were justifiable.
Gullas said Pilipinas Shell Petroleum Corp. earned P33.59 billion in cumulative net profits from 1998 to the first quarter of this year.
Petron, for its part, reportedly posted P35.18 billion in profits over the same period, said Gullas, who cited regulatory filings of the two oil firms as his source.
Upon learning of these huge profits, Rep. Antonio Cuenco (Cebu City, South) is also calling the oil companies to make a drastic rollback of prices of petroleum products.
Instead of a P1.50 reduction, as suggested by Malacañang, Cuenco said the current pump prices in the market should be lowered by P5 per liter.
Like Gullas, Cuenco said he would file a similar measure calling for oil companies’ officials to explain the series of oil price hikes when the 14th Congress resumes session on Monday.
Gullas said the committee of Rep. Juan Miguel Arroyo (Pampanga, 2nd district), the Presidential son, will mostly likely conduct the investigation.
If not, the House committee on Good Government and Public Accountability of Rep. Pedro Romualdo (Camiguin) can initiate the inquiry, Cuenco said.
Gullas noted that since last January, petroleum companies have jacked up diesel and kerosene prices 20 times, around P22 to P24 per liter, as well as gasoline prices 19 times, by about P19 per liter.
Citing his research, Gullas said Shell had reported a net profit of P3.1 billion from January to March this year while Petron reportedly got a net profit of P658 million in the same period.
Chevron Philippines Inc. (formerly Caltex), the third biggest oil firm, reported a net profit of P2.75 billion in 2006.
The petroleum company now merely operates a finished petroleum product import terminal following the closure of its 72,000-barrel of oil per day (BOPD) refinery in San Pascual, Batangas.
Gullas called on the Department of Energy (DOE) to use its powers under the Oil Deregulation Law to prevent petroleum firms from possible price manipulation.
The law, he said, explicitly provides that the Executive Department, through the DOE, and Congress can conduct an inquiry to look into the accounting books and protect the consumers from “potential pricing abuses.”
Gullas said the unabated oil price hike was a huge contributory factor to the negative 38 percent satisfaction rating of the President.
Meanwhile, the Energy-Justice Department task force formed to look into the alleged predatory pricing of petroleum products has started its investigation.
That developed as Malacañang dismissed criticisms to last Sunday’s P1.50 rollback on diesel price.
During yesterday’s meeting called by the Department of Energy (DOE) with oil companies, Justice Undersecretary Jose Vicente Salazar said they have started the investigation into the claims of various organizations on high oil prices.
“We (task force) are precisely doing that. We have started our investigation (on the reasonableness of oil prices) and we have started collating data,” Salazar said.
He stressed that the “role of the task force is to make sure that the interest of the consumers are protected.”
According to him, the task force has collected documents such as the reports of the University of Asia and the Pacific, the audit conducted by the Sycip, Gorres Velayo (SGV) as well as other important data that would help them determine if there were abuses in the pricing of oil.
“We’re in the process of assessing but it seems from the data we have right now, there is still no reason for us to file anything considering there seems to be no violation yet of the law or any of the laws,” Salazar said.
At the meeting, oil companies insisted that they still need to recover about P5.50 to P6.50 per liter for diesel in the coming weeks despite, reducing diesel prices last Sunday.
Seaoil Philippines president Glenn Yu said market forces forced them to roll back the price of diesel.
Yu said they have no other choice but to roll back diesel price since market leader Petron Corporation started cutting its price by P1.50 per liter.
Other oil representatives in the meeting echoed Yu’s claim. (GC/Sunnex)
