MANILA, Philippines - The Liquefied Petroleum Gas Marketers Association (LPGMA) criticized yesterday a provision in the LPG Industry Regulation and Safety Act of 2009 that imposes limits on firms that are authorized to refill LPG tanks.
LPGMA president Arnel Ty said in a press conference they are opposing a provision stating that only the company whose brand or trademark permanently appears on the LPG cylinder should be authorized to refill it. The bill is now in pending in the Senate’s plenary, awaiting second reading.
He said this provision “clearly favors” the country’s largest oil firms and would deprive the consumer of a legitimate choice in purchasing LPG in accordance with realistic market conditions such as price and availability.
“Stating that the original owner of the brand perpetually owns the LPG cylinder is contrary to Civil Code provisions on ownership,” he said.
Ty said the bill, if passed into law, would also mean the confiscation of six million allegedly dilapidated, “unsafe” cylinders. He proposed that the bill should instead impose a mandated cylinder exchange program among the LPG industry participants such as importers, re-fillers, marketers and dealers.
“We support the move to scrap the ‘unsafe’ cylinders. However it must be fair and equitable,” he said.
Ty said the measure could force 120 independent marketers and re-fillers and 24,000 independent dealers and outlets to close shop.
To ensure that small players and consumers will not be in the losing end, Ty said the government should have a mechanism wherein unsafe LGP tanks will be subjects of “replacement” agreement or be subsidized in favor of the consumer or marketers and dealers.
He said such replacement could be funded from the LPG revenue generated through value-added tax.
Ty reminded the government about the policy of the government to liberalize the oil industry to ensure a competitive market under the Downstream Oil Deregulation Law.
He said the effects of deregulation had never been felt more than in the LPG sector of the industry, citing Department of Energy statistics showing that small LPG marketers service about 35 percent of the market in Luzon alone. – Christina Mendez