Oil firms warned against another price hike

The Department of Energy yesterday warned oil firms against increasing oil prices again pending the result of an ongoing investigation by the DOE and the Department of Justice (DOJ).

A DOE-DOJ task force is determining if the petroleum companies have been unjustly raising their prices.

Oil company officials could go to jail and be required to pay fines if their companies are found to have increased their prices unreasonably, Energy Undersecretary Peter Abaya said.

Abaya said the DOE-DOJ task force will decide in the next two weeks whether or not the oil firms were justified in hiking pump prices by 75 centavos per liter last April 16.

The panel is currently reviewing the books of the oil companies.

"The (Oil Deregulation) law mentions that it is a violation if there is an unreasonable rise in price. The problem is the term ‘reasonable.’ Very subjective," Abaya said.

He said the law failed to clarify what level of price increase is reasonable or unreasonable, thus it is difficult for the DOE to provide its feedback to the committee reviewing the Downstream Oil Industry Deregulation Law or Republic Act 8479.

The DOE has recently appointed Cedric Bagtas, an expert on labor issues, as the representative of the labor sector on the independent panel.

The review panel is headed by Carlos Alindada, former commissioner of the Energy Regulatory Commission and former chairman of SGV.

Committee members include Peter Lee Yu, dean of the College of Economics of the University of Asia and the Pacific; Alberto Suansing, secretary general of the Confederation of Land Transportation Organization of the Philippines; Merceditas Garcia, president of the Petroleum Dealers Association of the Philippines; and Joey Leviste, former executive director of then Petroleum Board.

The review is expected to provide new direction to the role and powers of the DOE as fuel prices continue to go up due to rising world market prices of crude oil.

Meanwhile, Abaya also ruled out any plan to impose price control measures to stop oil companies from increasing pump prices.

Last week, the small oil firms hinted at another oil price hike of 75 centavos to P1 per liter as a result of the renewed uptrend in oil prices in the world market.