Home > Op-ed | To bottom

Political will

A P0.5 increase in oil price. A P20 increase in LPG price. After a week or two, another round of oil price increases is bound to take place. This is the sad reality that Filipinos from all walks of life have to contend with. But the worst part is that the government headed by Pres. Gloria Macapagal-Arroyo keeps washing its hands on this issue by harping that it can do nothing as oil industry has been deregulated.

With the oil deregulation law, government’s role in ensuring that prices of vital goods like petroleum products are regulated has been flushed down the toilet bowl as oil companies have been given the authority to increase prices of petroleum products. Concretely, the only recourse for government is to ask oil companies to slowly increase oil prices – this was the case last month when oil companies proposed an additional P2 in prices of diesel and gasoline and the government plead to them to implement the increase on a staggered basis, P0.50 increase per week – and to ask for discount rates for public utility vehicles.

Furthermore, the government has continuously deceive the Filipino people by holding vital information on the basis of oil price hikes. Every time Ibon Foundation, Contra Cartel or consumer groups present their studies to show that the increase in petroleum products is unjustified, the government is quick to dismiss that these computations as baseless.

But what is the new formula? Well, the formula or basis of oil price hikes remains a business secret as government will not divulge the computations of oil companies.

After 9 years of deregulating the oil industry, Petron, Caltex and Shell (Big Three) emerge stronger, contrary to the objective of dismantling the cartel, as they have been given more leeway to manipulate oil prices based on the automatic price adjustment scheme and therefore increase their profits. It is very obvious that the increases that the Big Three has been implementing is practically the same price adjustment and scrupulously practically at the same time. Presently, according to a research of Ibon, the Big Three control 8 out of 10 liters of petroleum products and 8 out of 10 gasoline stations.

Also, oil price increases directly and indirectly affects the prices of goods. As oil prices increase, prices of goods will follow suit. As a result, millions of Filipino families are tightening their belts just to cope with the increasing prices of basic goods and services. Particularly for drivers for public utility jeepneys, an increase in oil prices will surely result in a decrease in income.

We have said it before and we will say it again, the Oil Deregulation Law is clearly an anti-people law which benefits only the local oil cartel.

Furthermore, we believe that there is something the government can do about the soaring prices of petroleum products aside from appealing for oil companies to implement increases on a staggered basis and for discounts to public utility vehicles. Firstly, it has to recognize the existence of a local oil cartel and the necessity to dismantle this cartel. Secondly, government should scrap the Oil Deregulation Law and to curb oil price increases.

All it takes is political will. #

Home > Op-ed | Back to top