KMU to DOE: Prove there’s no oil overpricing

Labor center Kilusang Mayo Uno challenged the Energy Department today to prove the agency’s claim, made after the nationwide protest against oil overpricing yesterday, that there is no basis to statements that oil products are overpriced by P9.00 or more per liter, saying it is the agency’s task to assure the public on the issue.

Department of Energy Undersecretary Jay Layug made the statement in interviews with the country’s television stations yesterday.

“Where is the DOE’s research on the overpricing of petroleum products? Has the DOE compared the price movements in the world market with the price movements in the country since January 2008, for example?” asked Elmer “Bong” Labog, KMU chairperson.

“Many politicians and groups have been claiming that petroleum products in the country are overpriced. It is indefensible for the DOE to simply deny the overpricing of oil products without presenting any proof,” he said.

“Even ordinary people observe that the Big 3 takes advantage of oil price hikes in the world market to jack up local prices higher than the increase dictated by the world market. When there are price rollbacks in the world market, we get rollbacks smaller than the decreases in the world market,” Labog added.

DOE, overpricing modus operandi

KMU said the DOE itself has unintentionally exposed the Big 3’s modus operandi in overpricing petroleum products with its statements last August.

à 3rd week of August: Because of the $27 drop in the per barrel price of oil in the world market, the DOE said local oil companies should roll back per liter prices by more than P2.00. The Big 3 implemented less than P2.00 rollbacks, lower than P5.00 which legislators say corresponds to the price rollback in the world market.

à 5th week of August: The Big 3 hiked per liter prices by more than P0.35. The DOE responded that the price hike which corresponds to the increase in the world market is just P0.18.

“It seems that the DOE has been making statements about these discrepancies between price movements in the world market and in the local market only to distance itself from the shameless profiteering of the Big 3. It is not really doing research on the overpricing of petroleum products,” Labog said.

KMU said former Economic Planning director Ralph Recto and consumer advocate Raul Concepcion have said that oil products in the country are overpriced. In one of her commentaries, University of the Philippines professor Winnie Monsod also hinted at overpricing being carried out by the Big 3.

Open Big 3’s books

KMU also called for an audit of the Big 3, saying this will shed light on the oil giants’ overpricing and other profiteering schemes.

“While we have doubts as to the accuracy of the Big 3’s books, it would be better if these would be opened to the public. Let’s see where they are getting their profits which have been soaring non-stop,” Labog said.

Among the country’s corporations, Petron is No. 1, Shell is No. 2, and Caltex is No. 7 in terms of gross revenue in 2010.