Rollback sought from Big 3

MANILA, Philippines - Senators are seeking a rollback of oil prices from the so-called “Big Three” after Unioil Petroleum slashed its prices by P4.75 per liter for gasoline, P3.50 per liter for diesel and P1.50 per liter for kerosene last Monday.

Senate Minority Leader Aquilino Pimentel Jr. and Sen. Loren Legarda praised Unioil “for setting a precedent for other oil companies when it cut down prices substantially.”

“If other oil companies follow suit, it will enable our consumers to buy essential commodities at much lower prices,” Pimentel said.

The Big Three are Pilipinas Shell, Chevron Philippines Inc. and Petron Corp.

Pimentel said the government should respond not by raising the excise tax on oil but by lowering tariff duties on oil and oil products wherever possible.

According to Legarda, the prices of petroleum products in the Philippines are said to be among the lowest in the world save for those countries that provide consumer subsidies.

“Still, I think that the major oil players in the country – the so-called Big Three – must take the example of small player Unioil in rolling back the prices of unleaded gasoline, diesel and LPG (liquefied petroleum gas),” Legarda said.

“If Unioil can reduce the price of its gasoline by P4 per liter, I see no reason why Chevron, Shell and Petron cannot do the same, considering that they even have the economies of scale on their side, considering their market reach and the volume of their respective business,” Legarda said.

Legarda’s statement was echoed by Speaker Prospero Nograles.

The leader of the 265-man House of Representatives said Shell, Petron and Chevron can even double the price rollback that Unioil did, if only to show that it is concerned with the public’s welfare.

“They (Big 3) ought to roll back double that of the small players. They ought to explain this and Department of Energy should wake up and move against them,” Nograles said, urging Energy Secretary Angelo Reyes to do something about it.

Bacolod City Rep. Monico Puentevella, chairman of the House committee on transportation, wondered why the big oil players failed to lead the rollbacks among industry players, while Anak Mindanao Rep. Mujiv Hataman and Citizens Battle Against Corruption Rep. Joel Villanueva noted these oil companies are apparently more concerned about their multi-million-peso profits.

Unioil Petroleum Philippines general manager Chito Medina-Que Jr. said the company decided to roll back prices to give motorists the lowest gasoline prices in the market.

All motorists, whether credit card or cash customers, will be given outright discounts on products, he said.

He said the latest price cuts run counter to the usual market strategy of other oil firms of cross-subsidizing diesel prices by setting gasoline prices at much higher levels.

“Presently, we are seeing an eight-percent rebate on fuel credit card purchases and we are contemplating to give more than the eight percent in terms of outright discounts,” he said.

Last year, Unioil set the trend among local oil players with its big-time price rollbacks.

Sen. Edgardo Angara, for his part, said the public should not be lulled by seemingly lower price of petroleum products of some oil players in the Philippines because the country might face another series of oil price hikes in the near future.

“The Philippines is one of the most oil-dependent countries in Asia. This fact puts us in a vulnerable position as the country’s demand for energy can only be expected to grow as households, transport and factories multiply. In 2008, we saw the year of skyrocketing cost of fossil fuels with oil reaching record prices, although prices tempered near the close of the past year until present time. But we shouldn’t be lulled by these seemingly low price of petroleum products,” Angara said.

“The future is in clean, renewable energy, which is predicted to be one of the biggest industries by 2014. And we must turn this global financial crisis and lower oil prices as an opportunity to invest in green energy and technology. The passage of the Renewable Energy Act is a great step towards this direction. Much still needs to be done not only in policymaking, but in engaging both the public and private sector,” Angara said.

The Renewable Energy Act of 2008 encourages local entrepreneurs to go into the development of the country’s vast renewable energy resources and decrease dependence on imported fossil fuels.

Angara, through the Congressional Commission on Science and Technology and Engineering (COMSTE), is currently exploring the possible options for the implementation of renewable energy generation in the Philippines as an alternative to fossil fuels. –With Delon Porcalla