Small oil players urged to expand in Cebu

CEBU, Philippines - The business sector in Cebu is encouraging small oil players to expand their businesses in Cebu to induce competition and prompt the big three oil companies to set their prices at competitive levels.

Cebu Chamber of Commerce and Industry (CCCI) president Samuel Chioson said that while the private sector is a bit disappointed of the big three’s reaction to their plea to lower the price of petroleum in Cebu, the sector is inviting small oil players to expand so that consumers will have wider options.

Last year, the business sector called the oil giants to open their “books” for transparency.

As of last year, based on CCCI’s survey, prices of fuel in Cebu is higher by an average of P6 to P7 pesos compared to prices in Manila, even in neighboring cities in Visayas like Iloilo and Bacolod.

In Mindanao, wherein logistic expenses are expected to be more expensive because of nautical distance compared to Cebu, price of diesel fuel for instance in Davao is lower by at least P2.50.

According to Chioson the business sector is not convinced or satisfied by the reasons given by the big oil companies, which was attributed largely on competition, logistic expenses and exchange rate for the higher price here.

“We are also businessmen. We also don’t want them [big three oil players] to lose, but we want to know, what are their basis of computation why Cebu fuel prices are higher that other big cities in the Philippines, “said Felix Taguiam, CCCI trustee.

The chamber claimed that despite the big oil firms’ refusal or denial of a “cartel”, Chioson said the business sector is still convinced that the unified higher price of fuel in Cebu by big oil players is an indication that there is really a “cartel.”

Chioson said because of this “unexplained” high price of fuel in Cebu, it is not only the business sector that is affected, but more importantly, it is hurting the daily income of over 12 thousand public utility vehicle (PUJ) drivers, and more than five thousand taxi drivers, including “habal-habal”, and tricyle drivers.

The jacked up price of fuel in Metro Cebu has deprived a jeepney driver for instance a total of P10,500 income a month, this additional income could already send two children to college, with books and allowance expenses.

This time, as the big three has not responded to the business sector’s plea, Chioson said the Chamber will launch an active stance to encourage small players to come in and put in more gasoline stations, especially in strategic areas.

Although, there is already a presence of small oil players in Cebu such as PTT, Total, Flying V, among others, the problem is their location is not accessible to majority of motorists and private vehicle owners.

In an earlier interview with French oil giant, Total (Philippines) Corporation (TPC) it announced a P400 million investment plan for Cebu in the next three years.

This plan include the installation of five more stations in Metro Cebu this year, wherein the company will spend at least P120 million.

In an interview with TPC president and managing director Ernst Wanten, he said that Cebu’s vibrant economy presents a growth opportunity for TPC.