Change the octane rating to reduce prices!

It was a historic Special Meeting of the Regional Development Council (RDC-7) as it was the first one that was ever called. Without much ado, the Full Council overwhelmingly voted for Pres. Gloria Macapagal Arroyo (GMA) to reconsider her decision in approving the Mactan North Reclamation and Development Project and to remand the same to the Infrastructure Committee of the RDC. After the lopsided voting was finished, Gov. Gwen Garcia banged the gavel to adjourn the special meeting. End of argument!

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Cebu 1st District Rep. Eduardo Gullas recently exposed the hefty profits made by the two oil refineries, Pilipinas Shell Petroleum Corp. and Petron Corp. which both raked nearly P70 billion in combined net profits since the passage of the Oil Deregulation Law in 1998. According to Rep. Gullas, Pilipinas Shell posted a P33.59 billion in cumulative net profits, while Petron bagged P35.18 billion for the same period. No doubt, oil companies are raking so much profits, while the rest of Pinoy businesses have suffered!

But when oil companies rake in humungous profits at the expense of our economy that opens them to closer scrutiny by government agencies like the Department of Justice (DoJ), which coincidentally has already been announced on behalf of the Department of Energy’s Task Force led by Justice Undersecretary Jose Vicente Salazar. Usec. Salazar says that government is mandated under the Oil Deregulation Law to prosecute those engaging in unfair market practices. If there are violations of law, the government will definitely prosecute.

Mr. Fidel Jugo, fed up with high gasoline prices, did his own research, which he calls “Fuel Choices in the Philippines-A Necessary Review to Lower Fuel Pump Prices” and emailed me a PowerPoint Presentation of this research. Mr. Jugo compared gasoline pumps in the US to those here in the Philippines. Looking at the photos he sent, you will immediately notice that the octane ratings here in the Philippines are totally different from those in the USA.

Gasoline pump in the Philippines have octane ratings written in front which are 93, 95 and 96. While in US gas station, gasoline pumps are 91,89 and 87. So Mr. Jugo brings us the poignant question: “Do we know what are octane ratings for?”  Mr. Jugo says that octane rating is a measure of the auto ignition (engine knock) resistance of gasoline and other fuels used in spark-ignition internal combustion engines. It is a measure of anti-detonation of a gasoline or fuel and nothing else! The higher the octane number, the more resistant it is to engine knocking.

During the 70’s, 80’s and most of the 90’s when cars had carburetors, engine knocking was quite common and it was blamed on the octane rating of our gasoline. But this is the new millennium and car engines have shed those ancient carburetors in favor of Fuel Injection engines, which are computer controlled. So if you looked at the manufacturers’ specifications on popular cars today, it’s okay to use 90 octane and you won’t experience any knocking at all. Sorry but I don’t have enough space to print all the octane requirements of all cars.

What Mr. Jugo is telling us is that in the past 20 years, the oil companies have been taking the Filipino motorists for a ride, giving them all the hoopla and the BS that octane rating equates to more power and better mileage. Just look at their tv ads and you’ll know what I mean. Today Pinoy motorists are paying extra for gasoline with higher octane rating than their engine requires. Now this is something that the DoJ ought to look into.

Mr. Jugo suggests that oil companies should do away with all our 95 Octane Vortex Silver or the 95 Octane Vortex Gold, the 95 Octane XCS Plus, the 93+Octane XTRA or the highest Octane of all, the 96 Blaze because in the US these are the octane ratings for sports or racing cars! Sunoco Oil in the US sells 93 Octane gasoline for racing cars, Porsches and Ferraris!

So if the object of the investigation of the DoJ is to find out where the oil companies have been making excessive profits in their quest to find ways to reduce gasoline pump prices, the oil companies should only sell 87, 89 and 91 Octane rated fuel. That’s not all, the Cetane levels of diesel fuel (that’s the Octane rating for diesel) is between 45-50 Cetane when most of our diesel engines can run only with 40 Cetane. So let the oil companies explain all this!

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Special greetings to Dame Margot Osmeña on her nth birthday today. It is a doubly special as today is also the 25th Wedding Anniversary of Margot Osmeña and Mayor Tommy, whose 60th birthday is tomorrow! God Bless you both for the years that the Lord has given you as a couple!