‘Big 3’ earn P164M daily, says Bayan Amy R. Remo Philippine Daily Inquirer
May 23, 2009
MANILA, Philippines—Petron Corp., Pilipinas Shell Petroleum Corp. and Chevron (formerly Caltex) Philippines, leading players in the oil industry and also referred to as the Big 3, are earning almost P164 million daily from selling petroleum products that are overpriced, according to the militant multisectoral group Bayan (Bagong Alyansang Makabayan).
Based on its latest estimates, Bayan said all petroleum products on the average were overpriced by around P5.11 a liter.
The group made the allegation as its members held a protest rally Friday in front of Shell’s main office in Makati City to condemn alleged abuses of oil companies and to press for the repeal of the Oil Deregulation Law.
“Petron is earning P76.64 million every day from overpriced oil. Shell, on the other hand, is earning P59.21 million daily and Chevron, P27.92 million,” Bayan said in a statement.
The group’s estimates looked at the monthly movement of Dubai crude and the US dollar-peso exchange rate and their combined impact on pump prices. The results were then compared with actual price changes monitored by the Department of Energy (DoE).
“Such abuses have become possible because the Big 3 continues to monopolize the oil industry in the Philippines, controlling around 83 percent of domestic petroleum products,” Bayan said.
Oil cartel
According to the group, the Oil Deregulation Law did not dismantle the oil cartel but even made it stronger because the important regulatory functions of government, such as control on price adjustments, were taken away.
Although the National Economic and Development Authority said it supported calls to review and amend the Oil Deregulation Law, Bayan noted that this was not enough to curb the abuses.
“Additional powers given to the DoE, for instance, will not stop the abuses of the oil companies as long as the policy framework is to let so-called market forces set the fair price of petroleum products,” it added. “An entirely new policy regime is required to ensure that Filipino consumers do not pay for overpriced oil.”
For an effective regulation of the downstream oil industry, Bayan offered the following suggestions:
• exclusive government procurement of imported crude oil and petroleum products;
• the establishment of an oil price and supply buffer;
• increased state participation in the storing, refining and retailing of oil; and
• the setting of prices through public hearings and consultations.
