Gullas urges Congressional probe on higher VisMin LPG prices

CEBU, Philippines -  Congress has been urged to investigate the “excessive” retail prices of liquefied petroleum gas (LPG) in the Visayas and Mindanao that are almost 14 percent higher than those in Luzon.

“The House committee on energy should look into the matter, which we find exceptionally harsh and burdensome to consumers in the Visayas and Mindanao,” said House Assistant Majority Leader and Cebu First District Rep. Eduardo Gullas.

Gullas was responding to findings that LPG in the Visayas and Mindanao costs at least P100 more per 11-kilogram cylinder when compared to prevailing retail prices in Metro Manila and Luzon.

Department of Energy (DOE) officials bared their findings in the course of a congressional budget hearing.

Gullas said his office was able to independently verify the unusually large price discrepancy over the weekend.

“For instance, in the case of the 11-kg Petron Gasul, it is being sold for P828 and P727 in Cebu City and Quezon City respectively – a price difference of P101 or nearly 14 percent,” he pointed out.

Gullas blamed the extreme prices on “the lack free and fair competition” in the LPG market in the Visayas and Mindanao.

He noted that Petron Corp. now dominates the LPG market in the Visayas and Mindanao, after the company acquired the cooking gas business of Chevron Philippines Inc., formerly Caltex Philippines Inc.

Earlier, Cebu Gov. Gwendolyn Garcia had announced that the Capitol is planning to drop Petron as fuel supplier for Province-owned vehicles because its prices are higher than that of other companies. Garcia had also filed a complaint against the big three oil companies for higher fuel prices in Cebu compared to other parts of the country.

Next to Petron, Gullas said there are only two other LPG players in the Visayas and Mindanao – Pilipinas Shell Petroleum Corp. and Pryce Gases Inc. A fourth player, Total (Philippines) Corp., gets its bulk supply of LPG in the Visayas and Mindanao from Shell.

“We really have to quickly open up the LPG market in the Visayas and Mindanao to increased competition. Regulators have to encourage independent players to come in and compete with the big firms so that consumers will be afforded more choices,” Gullas said.

“Strong competition will surely help bring down LPG prices outside Luzon,” he added.

The LPG Marketers’ Association (LPG/MA) Party, which represents Luzon-based independent small refillers and dealers in Congress, has already filed a formal complaint against the “inordinately high” cooking fuel prices in the Visayas and Luzon.

“We are all getting behind the complaint filed by LPG/MA,” Gullas said.

LPG/MA, represented by Arnel Ty in Congress, addressed its complaint to the Joint DOE-Department of Justice Task Force, which is empowered to protect consumers against any unwarranted increases in the prices of fuel products.

“We must stress that it is possible to engage in business and get fair returns without having to resort to pricing abuses at the expense of consumers,” said Ty, a member of the House committee on energy. — PR/JPM (FREEMAN)