MEDIA RELEASE April 19, 2000
The Bagong Alyansang Makabayan today assailed oil companies for refusing to lower retail prices even if world crude prices have gone down significantly since last month.
"By simply maintaining prices, the oil companies have silently raked in billions of pesos. Unfortunatley, most Filipinos, who are unaware of world oil price movements don't know that they're being robbed," said Bayan Secretary General Teodoro Casiņo.
The average Dubai spot prices, the average price of crude oil went down by $3.31 per barrel from $25.06 last March to $21.75 this April. Based on the industry rule of thumb, each time the price of crude oil went down by a dollar, there should be a corresponding decrease in local petroleum prices by 30 centavos per liter. Likewise, for every change in the peso-dollar exchange rate, there should be a 10-centavo corresponding change in local prices.
Based on world price movements alone, this means that local petroleum prices should go down by 99 centavos per liter. Energy Secretary Mario Tiaoqui said oil companies could afford to lower prices by 40 centavos per liter.
Bayan said the Estrada government is also part of this grand theft. "Despite their knowledge, they have done nothing to force the oil companies to lower prices. They are also aware of the fact that the deregulation law severely limited government's hand to act on such abuses and yet, they still chose to enforce this one-sided policy," said Casiņo.
Casiņo said the oil cartel are notorious for this kind of overpricing. February 1998-1999, the price of crude oil went down by $2.54 per barrel, while the exchange rate went down by P40.41 to P38.83 a dollar. This means that Petron, Shell and Caltex should have lowered prices by an average of 93 centavos per liter but they only lowered it by 56 centavos per liter.
Aside from overpricing, Petron and Shell are also involved in the illegal use of tax credit cerificates in order to evade paying millions of taxes to the government.
The oil companies said they cannot lower oil prices since they have a 55-day inventory which means that the petroleum they are selling was based on the price that prevailed almost two months ago. Hence, any decrease in world prices would only be reflected after 55 days.
"If this were true, how come they were only revealing it now? When world crude prices were decreasing, they always seem to be in a hurry to raise prices. They don't wait for 55 days," said Casiņo.
As for the need to recover the oil cartel's alleged losses, Bayan said "nobody believes in this lie anymore, especially after the tax credit scam was exposed to the public." ###