DOE to Mindanao oil players: Explain unusual price cuts

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THE energy department urged Mindanao oil players on Thursday to explain the unusual price reductions in gasoline products that may be breaching provisions under the existing law.

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According to the Department of Energy-Mindanao Field Office (DOE-MFO), oil companies in Mindanao rolled back their prices by an aggregate of P3.00 over the period of 30 August to 6 September, hence attracting the DOE’s attention.

While price rollbacks like this are a welcome development for consumers, the DOE cautioned that sudden and sustained huge decreases in oil prices might qualify as an “anti-competitive behavior” under the Oil Deregulation Law.

This market behavior puts both the smaller oil players and the consumers at a disadvantageous position in the long run, it said.

Smaller oil players may actually lose their market share and end up closing, allowing the remaining oil players the chance to dictate prices to the detriment of the consuming public, the agency said.

Relative issues brought about by this market behavior include the peddling of petroleum products using the “bote-bote” or canister scheme and the alleged smuggling of oil products from nearby countries, particularly Malaysia and Indonesia, the DOE said.

Currently, the DOE-MFO has already been coordinating with the local government units (LGUs) concerned and the Bureau of Fire to eliminate the “bote-bote” scheme while also discouraging consumers from patronizing such activity as this may endanger public safety and health

On the alleged smuggling of oil products, the DOE said it is now in talks with the Bureau of Customs as this may hurt not only the oil industry players, but also the economy of LGUs in Mindanao and the rest of the country.

“Taxes are lost, affecting the delivery of basic services to our people,” it said.

The DOE said it is closely coordinating with the Department of Justice (DOJ) for the possible convening of the DOE-DOJ Task Force to determine any violations of the law.

In the meantime, the DOE gave assurances of its continuous vigilance to protect the welfare of energy consumers.

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