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By Euan Paulo C. Añonuevo, Reporter
Energy Secretary Angelo Reyes ordered oil
companies to desist from disclosing to media future fuel and
cooking-gas price hikes.
During a stakeholders’ meeting Wednesday
organized by the Department of Energy, Reyes said the oil firms
should stop making early announcements on price increases so as not
to cause undue panic and anxiety on consumers.
“It will not serve anybody any good if they
will make announcements based on their own projections,” he added.
Reyes’ order came about after media clarified
whether his earlier remarks lambasting Arnel Ty, head of Liquefied
Petroleum Gas Marketers Association, during the meeting meant a stop
to early price-increase announcements.
The Energy chief had castigated Ty for being too
open to media about the group’s future price adjustments—a
practice not common among larger oil firms—such as the P3.50 per
kilogram increase that the marketers association tagged on its
liquefied petroleum gas products a week ago.
The cooking-gas retailers’ adjustment was
announced much early on while big oil companies made their own
public announcements only a few hours before implementing their own
price hikes.
In front of media, transport groups and
officials of the government and oil firms, Reyes told Ty that he
“should not speak for everybody” and that his group should
instead be “competing with each other [in the group].”
He said the marketers’ association is
“increasing prices ahead of everybody” and is also in the
forefront when cooking-gas prices go down just to look good in
public.
But Ty said his group’s cooking-gas price for
its 11-kilogram cylinders, which costs about P610 each, is not
enough to influence prices as it is still the lowest in the
industry.
Under the Downstream Oil Industry Deregulation
Act of 1998, oil firms are allowed to automatically increase their
pump prices but are not compelled to announce such move to the
public.
But the Energy department requires oil companies
to inform the department within one day, but not less than six
hours, of any move to increase prices and any public announcements
related to this.
Despite the public berating, Ty later told media
that his group will comply with the Energy secretary’s order but
stood by the legality of the group’s price adjustments, which he
said can be attested to by their supplier, Liquigaz Philippines
Corp.
“The [Energy department] knows best. We will
just follow it first,” he said.
Ty added that the marketers association will
also be attending future meetings organized by the department to
come up with a system for making announcements on price adjustments.
Other oil company officials present during the
industry meeting deferred to Reyes’ order, saying that making
early disclosures on price adjustments may lead to hoarding of
petroleum products.
Rate adjustments ‘reasonable’
Ironically, while Reyes questioned the Ty
group’s price adjustments, a report released during the meeting by
Peter Lee U, University of Asia and the Pacific School of Economics
dean, found that price adjustments implemented by the oil firms are
“reasonable.”
The study, which was commissioned by the Energy
department for a pittance, however, focused only on Petron Corp. and
Pilipinas Shell Petroleum Corp.’s price adjustments from December
2006 to November 2007. The two firms represent 70 percent of the
total petroleum market in the country.
“Oil price increases have been reasonable.
They were not out of line and are consistent with what they are
saying that they have under-recoveries,” Lee U said.
He added that while many analysts are saying
that oil prices may continue to stay at high levels abroad, the best
protection government can offer to consumers is to have the
petroleum industry be more open to new players to spur competition.
“The country needs a credible competition
policy with an enforcement agency,” Lee U said.
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