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Senator wants transparency in oil prices

Senator Win Gatchalian on Monday raised the need for transparency in the downstream oil industry in the pricing mechanism for pump prices of fuel products.

The Chairman of the Senate Energy Committee made the call following a Supreme Court ruling barring a Manila trial court from directing the Bureau of Customs, Bureau of Internal Revenue, and Commission on Audit to open and examine the books of accounts of Petron Corporation, Pilipinas Shell Petroleum Corporation, and Chevron Philippines for alleged monopoly and collusion.

The Supreme Court even ruled that under Republic Act 8479, or the Downstream Oil Industry Deregulation Act of 1988, the Department of Energy and the Department of Justice (DOE-DOJ) Task Force was mandated to investigate and file the necessary complaints with the proper court against erring oil companies.

“I’m planning to file a bill that will give more teeth to existing laws in the downstream oil industry and we are studying ways to strengthen the anti-trust safeguards in RA 8479 and how it can interact with the Philippine Competition Act,” Gatchalian said.

The Anti-Trust Safeguards stipulated in RA 8479 ensures fair competition and prevents cartels, monopolies, and predatory pricing in the industry.

Many consumers have been complaining that whenever world crude prices increase, these major players instantly hike prices despite the fact that they had purchased their inventories at a much lower price long before the scheduled increase, prompting the senator to look into the uniform price adjustments of the ‘Big 3’ oil companies.

The lawmaker hit the lack of transparency in the pricing mechanism that is why the doors are wide open to speculations of possible collusion among the ‘Big 3’ to manipulate pump prices.

Based on the DOE’s Oil Industry Management Bureau year-end comprehensive report for the fiscal year 2019, the three major oil players continue to have a stronghold of the country’s petroleum product market share cornering 50.65 percent of the total demand.

Of the three oil giants, Petron Corporation enjoys 24.59 percent of the market share followed by Pilipinas Shell Petroleum Corporation with 18.49 percent while Chevron Philippines comes in third with 7.57 percent.

“The promise of the law is to provide reasonable prices, encourage competition and investments. The cut-throat competition among oil companies leading to lower prices, which was envisioned when RA 8479 was enacted, is simply not happening,” Gatchalian added.

Topics: Win Gatchalian , oil industry , Supreme Court , Department of Energy
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