By Myrna M. Velasco
The country’s oil companies are being required to submit regular report to the Department of Energy (DOE) fleshing out the ‘detailed calculation’ of the price adjustments they have been enforcing at petroleum pumps.
Department of Energy (DOE) logo
In the Circular issued by the energy department May 28 this year, it was expressly prescribed that the oil firms shall “strictly comply with the submission of the formal notice to the OIMB (Oil Industry Management Bureau),” and that shall entail turning in report “containing the detailed computation with corresponding explanation and supporting documents on the cause/s or reason/s of the movement of the individual price adjustment.”
It was further directed that “within two months after the effectivity of this Circular or whenever required by the DOE or by the DOE-Department of Justice (DOJ) Task Force, oil companies shall be required to submit a report to the OIMB.”
The pricing components to be fully explained in the reports’ submission to the DOE had been subdivided into four major components.
First is international content that ropes in import cost for crude or finished product; freight cost; insurance; and foreign exchange rate.
The second cost component delves with taxes and duties, to include: duties, excise tax, value-added tax (VAT) and other imposts.
The third fraction of the pump price costs would be the biofuel blend on gasoline and diesel products; while the fourth is on the “oil company take components” that also factored in port charges; refining cost for crude; storage cost, handling cost, marketing cost, transshipment cost, oil company profit margin and other costs.
The detailed pump price reporting shall cover per liter and ‘per product basis’ for liquid fuels, as well as liquefied petroleum gas (LPG) for both the automotive sector and the commodities used in household cooking.
Energy officials nevertheless apprised media previously that the required reports from the oil companies will be confined as “information that will be for the eyes of the DOE and the relevant industry players only,” hence, those details will not be made public.
The reports, it was further emphasized, “shall remain as a continuing requirement of the downstream oil industry and strict compliance to its submission shall be required using the price as of December 31 of every year thereafter, and shall be submitted to the OIMB on or before February 28 of the succeeding year.”
On the routine pricing adjustments, the energy department also directed the oil companies to enforce cost movements on a uniform day – which is Tuesday at each week.
“For the purpose of effective monitoring thereby avoiding possible confusion among stakeholders and consumers, the price adjustment for liquid fuel may preferably be implemented beginning every Tuesday of the week and applicable for the next seven days; and for LPG, beginning every first day of the month and applicable for the whole month,” the DOE has stated.