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By Euan Paulo C. Añonuevo Reporter
Despite regular pump increases
that have driven fuel prices to record levels, the country’s
petroleum industry, believe it or not, supposedly is also taking a
beating from soaring crude prices.
So are smugglers, according to
officials of oil companies and the Energy secretary. They said the
expensive crude may have also affected the operations of smugglers,
as reflected in the companies’ increased sales volumes in the past
few months despite the high prices.
Energy Secretary Angelo Reyes
said smuggling operations have stopped as it has become expensive
for those engaging in these illegal activities to do so.
Ed Chua, the country chairman of
Pilipinas Shell Petroleum Corp., on Wednesday said high oil prices
are putting a strain on oil firms’ pockets as they would have to
spend more to buy the products they sell to their customers.
Officials of other oil companies
agreed with Chua during an industry stakeholders’ meeting
organized by the Department of Energy where they aired their
concerns amid the skyrocketing prices of oil in the world market.
Rising interest and
foreign-exchange rates because of inflation and the weakening peso
also are putting much pressure on the oil companies’ product
pricing.
From February to April alone,
Chua said, the petroleum industry has incurred more than P2.5
billion in “losses” from diesel whose prices at the pumps do not
immediately reflect what oil firms actually spent for.
Although these “losses” are
recovered from consumers through the seemingly unending fuel-price
hikes being implemented weekly, the oil companies have to stagger
these increases, apparently in a bid to feel the public pulse.
The oil firms, however, cannot
afford prolonged bleeding, which may compromise the country’s fuel
supply as it would affect the oil firms’ working-capital needs.
The negative effect supposedly is being felt already by
retail-station owners who have had to cut profit margins.
“Shortage of supply will be a
reality if local prices are not attuned to international prices,”
said Fer Martinez, Eastern Petroleum Corp. chairman and chief
executive officer.
Martinez, who also heads the
Independent Philippine Petroleum Companies Association, stopped
short of calling for a one-time increase, which was suggested during
the meeting. Consumers will not benefit from such hike, according to
the stakeholders.
The staggered increases seemed to
be helping the country cope much better than its neighbors, who have
had to bear the brunt of substantial spikes in fuel prices.
Chua said Bangladesh, China,
India, Indonesia and Malaysia recently were forced to jack up
subsidized pump prices from 20 percent to as high as 60 percent.
But while significantly hiking
their pump prices, the five countries have also started to offer
billion-dollar subsidies and rebates to their transport sectors and
low-income groups to help them cope with rising fuel prices.
Ana Whitehouse, the country
chairman of Total (Philippines) Corp., said the Philippines is in a
far better position than its five neighbors in tempering fuel
adjustments. But she added, “Transparency in the windfall revenues
of the government will go a long way in mitigating the high
prices.”
These revenues are profits earned
by the government from taxes imposed on imported oil products, from
which it is estimated to have earned P18 billion in light of the
high prices.
Ramon Villavicencio, Flying V
chairman, urged the government to use this sizable profit to provide
subsidies to the transport sector.
He also broached the idea of an
all-out pump adjustment to allow transport groups to finally have
their fare-increase demand granted.
Representatives of the transport
groups to the meeting said jeepney fares have only inched up by a
few centavos, while diesel prices have more than doubled in the last
three years. They scored the government, particularly the Land
Transportation and Franchising and Regulatory Board and the National
Food Authority, for not making good on their promised subsidies.
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