Media Release March 17, 2000
Today marks the restaging of last year’s popular weekly Black Friday Protest against oil price hikes, the oil cartel and the oil deregulation law.
From 3 to 6 p.m., member of Kontra Kartel distributed black ribbons, `rollback’ stickers, posters and flyers to passing motorists and pedestrians in four Black Friday Stations in Metro Manila: Cubao, Ayala Ave., Araneta Ave., Roosevelt Ave., and Sta. Mesa.
In the morning, Kontra Kartel sponsored a forum with legislators, representatives of transport groups, urban poor and other cause-oriented groups to discuss measures on how to go about the people’s demand for a rollback, the busting of the oil cartel, and the scrapping of the oil deregulation law. Among those present were Cong. Enrique Garcia, Piston chair Medardo Roda, Bayan/KMP chair Rafael Mariano, Bayan secretary general Teodoro Casiño, KMU officer Tito Go and Kontra Kartel spokesperson Carol Almeda.
During the forum, Kontra Kartel spokesperson Carol Almeda said contrary to what the Estrada government says, there are a number of things that the government can do to immediately stop rising prices. She enumerated them as follows:
The price increases they imposed in the country is always higher that the actual commensurate change in the foreign exchange and crude prices. On the other hand, when the peso-dollar exchange rate went down, they did not, lower their prices. Estimates conducted by IBON Foundation and Cong. Enrique Garcia showed that this amount translates to P2.55 billion to P20 billion a year.
According to Almeda, this would provide immediate relief to the people. “Governmentshould look for a more progressive way to collect taxes from the people. Anyone who took basic Economics course know that with an excise tax, the greater burden of shouldering it falls on the poor. However, what goes on in the minds of government officials when they refuse to remove excise taxes is that it is a lot easier to collect. Further, they don’t want to displease the IMF and World Bank who are closely monitoring that budget deficit. The government should restructure our tax systems so that the poor don’t end up paying more in taxes than the rich and big businesses.”
This could curb the rampant practice of overpricing among the members of the oil cartel which amounts to a whooping P39 billion a year. According to Cong. Garcia, there’s a $3 per barrel difference between the price of refined petroleum products of the three oil companies and the Singapore export prices which could only be explained by transfer pricing.
“Shell, Petron and Caltex have supply contracts with their mother companies Royal Dutch Shell, Suadi Aramco, and Texaco. Thus, no bidding takes place when they buy crude oil and this encourages the practice of overpricing their local affiliates. This is the reason why landed costs of crude oil in the country is always higher than the US,” she said.
Almeda emphasized that this is unlike the Oil Price Stabilization Fund (OPSF) where oil companies could reimburse any decrease in their revenues as a result of not raising prices. “It would function as a subsidy to the people,” she said.
However, Almeda said that thses are only short-term measures to ease the burden of rising prices on the people and weaken the cartel’s grip on the industry.
“These measures are not sufficient to break the control of the oil cartel, nor could it prevent another unjustifiable oil price huke. In order to guarantee that oil prices would remain low and that the industry serves the country’s industrialization efforts, the oil deregulation law should be scrapped and the industry be nationalized,” she said.
“This takes a lot of courage to stand up to the oil cartel and the IMF and the World Bank. However, it is apparent that Pres. Estrada couldn’t do this because we even see him on his knees to the oil cartel. He has also created the Economic Coordinating Council, a powerhouse cast of the most dogmatic neoliberal technocrats to decide on his administration’s economic policy. It is therefore of little wonder that this same group was the first to shoot down the proposal to create the National Oil Exchange, to scrap the excise taxes on petroleum products and insisted on keeping the oild deregeulation law intact despite massive clamor for its reversal,” said Almeda.#