Press Release
January 6, 2009

Consumers discriminated by big oil firms' selective price matching -- Loren

Senator Loren Legarda urged today Shell, Petron and Chevron to lower gasoline and diesel prices across all markets nationwide and not just to match the lower prices of smaller players where the latter are operating

Loren said that if big oil companies can lower the price of gas and diesel in areas where smaller oil firms challenge their market presence, then there's no reason why the oil giants cannot cut prices across the board.

"Big oil players must not be allowed to selectively cut prices in response to market challenge as it is a form of price discrimination to consumers," she said.

She cited as example one major player which, during the holidays, brought down the selling price of its unleaded gas to about P31 per liter in its dealer located along the Diosdado Macapagal Boulevard to be competitive with a dealer of a smaller oil player which sold unleaded gas at about P29 per liter.

In most other dealers of the big player, unleaded gas was sold at about P33 per liter.

Loren urged government agencies like the Department of Energy (DOE) and the Department of Trade and Industry to pressure all oil companies to lower pump-prices commensurate with the plummeting price of oil in the world market.

"Selective price matching is discriminatory to consumers outside of the selling areas where competition are lowering prices. Take for example jeepney drivers and operators whose routes are not covered by the franchise areas of independent oil firms selling cheaper fuel," she said.

"They are discriminated upon because they cannot go out of their assigned routes to buy cheaper fuel at the nearest dealer of the independent producers," Loren explained.

"Likewise, it gives consumers the idea that the big players are not lowering enough the prices of petroleum products," she added.

Loren urged oil companies to practice corporate social responsibility, especially with the country and the rest of the world facing uncertainties due to slowing economies.

She said that the generation of profit by said companies must be balanced with the impact their pricing schemes has on consumers and the general public.

Loren added that some sectors believe that unleaded gas should be selling at about P25 per liter at most due to the big drop in the world market prices of oil.

Various transport groups have been protesting the top oil companies to follow the lead of independent oil players, saying a rollback to at least P30 per liter in diesel prices will allow them to reduce fares by at least 50 centavos.

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