JAMBY RENEWS CALL FOR REPEAL OF OIL DERGULATION LAW,
RECOVERY OF PETRON

While I acknowledge the Executive Department's move to require the oil companies to submit a written explanation on the recent oil price increase, this is only a short term solution. We must look at a long term solution to this issue, such as the repeal the Oil Deregulation Law, the recovery of Petron and to place LPG under price control.

Implementing state regulation on pump prices and the activities of oil companies has become more urgent. The benefits of a deregulated environment have not happened. The so-called three sisters of the industry - Caltex, Shell and Petron still control the domestic market, and the smaller oil companies simply follow the prices of the three sisters. Where is market competition there?

Since January, oil firms have raised the prices of gasoline, diesel and kerosene three times by a total of P1.50 a liter. The price of liquid petroleum gas (LPG) has also risen three times by P1.61 per kilogram or P17.71 per 11-kg cylinder. This happened despite the alleged strengthening of the Peso against the Dollar. What is now the excuse of the oil companies?

The price of unleaded gasoline went up by 70 centavos per liter and that of diesel by 60 centavos per liter as a result of the 2-percentage-point increase in the VAT rate. The price of LPG rose between P8.90 and P9.80 per kg. From 2000 to 2004, oil products have been overpriced by around PhP3.67 per liter. During this period, underpricing was recorded in 2001 and 2002 when the oil companies posted an under-recovery of PhP1.12 and PhP2.48 per liter, respectively. This was easily offset by overpricing in 2000 (PhP2.88 per liter), 2003 (PhP1.28 per liter), and 2004 (PhP3.11 per liter)

It is high time that the National Government regain control of Petron and strategically position itself in the highly volatile oil industry for the benefit and greater interest of the consuming public and the Filipino people.

Other countries such as China, Malaysia, India, Bolivia, Taiwan, Japan, Venezuela and Mexico have their own respective government owned corporations engaged in the petroleum business to compete with foreign owned corporations engaging in price manipulation and speculation.

Senator Jamby Madrigal had filed Senate Bill no.2084 for the repeal of Republic Act 8479 otherwise known as the Oil Deregulation Law; Senate Resolution no.322 urging the Senate Committee on Energy to conduct a review on the terms of agreement of the National Government, Shell Corporation and Texaco on the Natural Gas Reserves in Malampaya; Senate Bill Resolution no.324 urging the Senate Committee on Energy to conduct an inquiry on the possible buy-back of Petron Corporation by the National Government; and Senate Bill no. 2126 to place LPG under Price Control.