More transparency sought among local oil industry players

Local think-tank IBON Foundation said oil firms are not yet off the hook regarding issue of “real transparency” in oil pricing despite the recent rollback in pump prices.

IBON said the urgency for real transparency in the domestic oil industry remains. “Vital information needs to be disclosed for the public to be assured that the monopolized domestic oil industry is not profiting at their expense.”

IBON said the public has been put at the mercy of the oil firms and their mysterious pricing schemes, and is left to take the oil companies’ word that their prices are fair and their profits reasonable.

According to IBON, among the information that needs to be disclosed to the public are the retail pricing formulas and strategies of the oil firms domestically and as they relate to their foreign mother corporations; the overseas supply sources and the terms and periods of their supply contracts; any payments local firms make to mother firms whether as profit shares, charges for technologies or services, fees and other payments; refinery stocks and capacity; inventories and storage capacity; local sales and distribution to direct buyers, retailers and other oil firms.

While some of this information is already reported or otherwise available, other issues such as supply contracts have unfortunately been claimed as “confidential” by the oil companies. This information will not just address legitimate public doubts but also be vital in assisting policy makers and legislators in developing responsible energy policies.

IBON believes that the oil deregulation law has clearly failed to introduce effective competition in the downstream oil industry which remains subject to monopoly control and domination by the Big Three oil firms. It has merely allowed the global oil monopolies to freely pass on inflated crude oil prices and given the domestic oil firms license to price as they see fit, at the expense of Filipino consumers.

Oil is a critical sector with far-reaching impacts on the public welfare and cannot be allowed to operate on a largely profit-maximizing basis, said the think-tank. Real transparency is thus crucial for public interest to prevail.

The price of biodiesel sourced from coconut is slowly going down as the price of vegetable oils in the world market have started to soften.

As this developed, Chemrez Technologies Inc. (ChemrezTech) chief operating officer Dean Lao Jr. said oil prices may decline further with the use of higher biodiesel blend.

Chemrez, the country’s leading producer of biopetroleum, oleochemicals, resins and powder coatings, expects revenues to grow by P2 billion next year due to growth in all of its product groups including biodiesel, whose mandated B1 blend will be doubled next year. — With Katherine Adraneda