Despite PNoy’s vow to enforce competition laws to protect consumers from abusive and harmful business practices, it appears monopolies and cartels are thriving under his administration.
There’s the alleged fuel cartel of oil companies jacking up pump prices. There’s the purported power generation cartel that manipulated the electricity spot market prices resulting in the biggest power rate hike in Philippine history. There’s also the virtual tobacco monopoly that controls 90 percent of the country’s cigarette market.
But there’s another monopoly that exists right in the heart of the country’s new business district in Taguig City: the piped-in liquefied petroleum gas (LPG) supply for the Bonifacio Global City that’s controlled by Bonifacio Gas Corporation.
Bonifacio Gas is a joint venture between Fort Bonifacio Development Corp. (FBDC) and Pilipinas Shell Petroleum Corporation (Shell). FBDC owns 56.36 percent of the LPG supply firm, while Shell holds the remaining 43.64 percent interest.
FBDC, in turn, is the developer of the Bonfacio Global City. In 2003, Ayala Land, Inc. and the Campos group’s Evergreen Holdings Inc. bought out the 55 percent controlling stake of Metro Pacific in FBDC, with the remaining 45 percent held by the Bases Conversion Development Authority (BCDA), now headed by PNoy-appointee Arnel Casanova as president.
Bonifacio Gas isn’t bashful about being a monopoly. In fact, in its website, Bonifacio Gas describes itself as “the exclusive piped gas-utility provider supplying and distributing liquefied petroleum gas (LPG) within the Bonifacio Global City.”
Bonifacio Gas also claims in its website that its corporate vision is to provide consumers with “economical” LPG supply. Like any monopoly, however, its prices are far from economical.
For the past several months, we’ve received numerous complaints from residents and merchants in the Bonifacio Global City about the overpriced LPG being sold by Bonifacio Gas.
One such complaint comes from a restaurant owner in the Bonifacio Global City who says residents and businesses in the district are prohibited by FBDC from bringing in or buying LPG from any other source except Bonifacio Gas. The problem, however, is that Bonifacio Gas’ prices are 17 to 47 percent higher than those outside Bonifacio Global City.
Last December, for instance, Bonifacio Gas charged P485 per cubic meter of LPG even though some suppliers were selling the cooking gas at only P329.54 per cubic meter or P155.46 cheaper. Two months ago, Bonifacio Gas’s rate was P425.75 per cubic meter, or P62.76 higher than other LPG suppliers who were selling it at just P362.99 per cubic meter.
With its LPG sold at such a high premium, Bonifacio Gas is clearly making a killing – unfortunately, with ordinary consumers as their hapless victims.
Residents and businesses in the Bonifacio Global City are forced to pay so much more because they don’t have a choice. And undoubtedly, a monopoly supplying LPG like Bonifacio Gas will definitely charge high prices because they face neither competition nor oversight.
Worse, the deafening silence of the government-owned BCDA – a joint venture partner in the company which controls Bonifacio Gas – gives the impression that this anti-competitive and anti-consumer behavior has the tacit approval of the Aquino administration.
But wasn’t it PNoy who declared during his state of the nation address that “it is the government’s duty to ensure that the market is fair for all?” That there would be “(n)o monopolies, no cartels that kill competition” during his term?
Wasn’t it also PNoy who created an Office for Competition under the Department of Justice (DOJ) supposedly to run after violators to “prevent, restrain and punish monopolization, cartels and combinations in restraint of trade?”
If PNoy’s anti-monopoly pronouncements aren’t all rhetoric, he should immediately direct Justice Secretary Leila de Lima to investigate BCDA, Ayala Land, Evergreen Holdings and Shell officials for violation of competition laws. Better yet, he should order Bonifacio Gas’s monopoly dismantled immediately and permit other LPG players inside Bonifacio Global City.
The lawyers we’ve talked to all agree that there’s no legal basis that can justify Bonifacio Gas’ “exclusive” right to supply LPG to Taguig’s business district.
True, the FBDC, as developer, may impose certain rules and restrictions for its Bonifacio Global City project. Such rules and restrictions, however, cannot prevail over the country’s anti-monopoly laws or the Constitution. Neither are such rules and restrictions a license for FBDC to corner the LPG supply in its own development project using its sister company, Bonifacio Gas.
Incidentally, our readers might be interested to know that Bonifacio Gas is actually being run by one of the country’s oil majors.
According to the company’s filings with Securities and Exchange Commission (SEC) in 2013, Shell country chairman Edgar Chua sits as president of Bonifacio Gas while another Shell executive is its general manager. In short, Bonifacio Gas is essentially another Shell operation.
Is it any wonder, therefore, why Bonifacio Gas’ prices seem like highway robbery?