Government to Probe Oil Price Hikes
MANILA – The Philippine government will look into the supposed "unwarranted" hike in fuel costs after pump prices rose for the 12th time this year.
President Benigno Aquino III also urged Wednesday oil companies to open their financial books to public scrutiny to show if price increases are justified.
Presidential spokesperson Edwin Lacierda said a task force was already instructed to check the possibility that oil companies may have committed abuse when they imposed fuel price increases.
Oil Industry Management Bureau director Zenaida Monsada from the Department of Energy (DOE) earlier hinted that the recent price increases were higher compared to the price calculated based on the formula set by the Energy Regulatory Board.
The task force will "evaluate abuse, if any," and check whether the oil price increases were higher than the estimates made by the energy department, he added.
Composed of officials from the DOE and Department of Justice, the task force was created to monitor and ensure that the adjustments are fair and reasonable.
"Every week, the DOE explains the numbers, what is expected price increase of oil and gasoline. In the last hike, there are some companies seem not to follow the numbers set by the DOE," Lacierda said.
The DOE already asked a number of oil companies to explain in writing why their respective fuel price increase imposed this week was higher than the number set by the DOE based on its calculation.
He questioned that while some oil companies increased their prices, Petron and other oil players did not impose the hike.
Although Chevron increased its prices, it is also set to rollback its price.
However, Lacierda clarified that the joint task force cannot impose a standard oil price setting because the country's Oil Deregulation Law allows market forces to determine fuel costs.
Monsada earlier said the joint task force has already received oil companies' reports, explaining their price adjustments.
On Tuesday, a number of petroleum firms implemented a fuel price hike of 60 centavos for gasoline and 25 centavos for diesel.
Monsada said the DOE's calculations indicated only a price hike of 39 centavos for premium gas and 16 centavos for diesel.
The government also allows oil firms to round off increases to the nearest 10 centavos, she added.
This means the government calculations would have allowed price hikes of 40 instead of 60 centavos for gas, and 20 instead of 25 centavos for diesel.
The President also emphasized the need to simplify the process of determining the oil price and the inclusion of a variety of sectors in computing the prices.
In a related report, Senator Edgardo Angara said the country has to develop alternate sources of energy to soften the blow of oil price hikes on the transport sector and on consumers.
"We import roughly 96 percent of our petroleum, the majority of which is consumed by the growing transport sector. This same sector accounts for the biggest share of the energy use, nearing 40 percent," said Angara, chairman of the Congressional Commission on Science and Technology and Engineering (Comste).
Comste has been pushing the development of a transport sector based on electric tricycles, electric jeepneys, and electric bicycles.
Angara said the development of electric vehicles will reduce pollution in the country's cities and could provide jobs once the local electric vehicle industry is strong enough.
Angara has also been pushing for government support for research into the use of biofuels from algae.
He said the United States Air Force has been experimenting with biofuel blend in the F-22 Raptor, its newest stealth fighter aircraft.
Biofuel also has commercial uses, with Houston, Texas-based Continental Airlines already using it in its passenger jets.
Angara earlier cited studies from the United Arab Emirates that it could cost less to process biofuel than gasoline. He said biofuels offer a more long-term solution to the country's dependence on imported oil.
Malacanang has announced the purchase of two month's worth of fuel but is still looking for somewhere to store it.
Senate President Juan Ponce Enrile said in a radio interview that the government could hire a tanker to store the 50 million liters of fuel but it will have to pay the tanker for each day it is anchored off Manila Bay.
He said the government should consider that oil prices may drop as America goes into the summer season, which would decrease demand for the United States' heating needs.
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"The price of crude oil today is not made according to any traditional relation of supply to demand. It is controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today's crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price" this were the facts that I have read in the internet but how can we control everything related to these issues?
I have observed that our country is suffering from many issues but this particular issue like oil price hike affects a lot of Filipino people. Pedicab drivers, jeepney drivers, taxi drivers and others were always complaining because for them rapid and continuous oil price hike is not normal for a country to have.
I think our government should have an investigation about this issue or maybe they should determine the root and cause of this crisis.
Government should focus more on the economic problems not only to those people who has an issue against our country because in economic problems a lot of people will suffer and affected.
