Oil pricing disparity caused by smuggling, Petron says

By Myrna M. Velasco

The glaring disparity in fuel prices being sold to consumers is being attributed to smuggling activities, which industry players theorized to have remained an unbridled illegal act in the downstream oil sector.

Leading oil firm Petron Corporation primarily noted reports of ₱10 to ₱15 per liter cost difference at some retail pumps, and opined that this is “a clear indication that smuggled oil continues to flow in various parts of the country.”

The Department of Energy (DOE) itself is upset over consumer complaints that neighboring provinces in Northern Luzon have been paying disparate prices on their fuel consumption – with most Baguio residents shelling out ₱10 to ₱12 more per liter when they fill up at the gas stations.

Hence, beyond the fuel price unbundling that the department has been legally fighting versus the oil companies, the department indicated that it would also be sleuthing as to what particular factors have been causing such cost incongruity.

With Petron perceiving smuggling and other illicit trade practices as the trigger, it opts for “level playing field in the industry” – emphasizing that all players must rigorously follow rules and policies, including ethical payment of the right taxes.

The country’s biggest oil company emphasized it will be the government and country that will be on the losing end if unscrupulous traders or players in the industry could just get away scot-free on their felonious business acts.

The oil firm cited its Subic operations as one that manifests "level playing field" across the marketplace; and such enabled its Petron Freeport Corporation subsidiary to even post double-digit income growth as well as sales expansion.

With its two stations in the area, plus the leases it had been dangling to locators in the freeport zone, the company reported 20% income growth and 14-percent sales rise in the first six months of the year.

The end-users being served by this Petron firm are mainly locators in the freeport zone – and are exempt from paying national and local taxes, including excise taxes.