House Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate on Sunday, Oct. 3, called for the centralized procurement of petroleum in the country to protect consumers from oil price hikes.
Zarate also urged fellow House leaders to prioritize the passage of House Bill 4712 to provide for the said system of petroleum procurement.
He made the recommendation amid reports that the country will experience the biggest oil price hike since the COVID-19 pandemic gripped the country last year. A P2.00 per liter increase is set this week as global price acceleration of petroleum neared the $80 per barrel mark, “Based on oil firms’ calculation, gasoline prices will increase by P1.45 to P1.55 per liter while diesel prices will climb by P1.95 to P2.05 per liter. The price of kerosene products will also increase significantly by P2.00 to P2.10 per liter, because of higher demand for this commodity. There will also be a big time price hike of P7.35 to P7.40 per kilogram of cooking fuel liquefied petroleum gas (LPG) that would be a terrible burden to consumers,” said Zarate.
“For the longest time, the Big Three (3), or the local subsidiaries of Shell and Caltex and Petron, claim and justify that they do not overprice, that they set prices based on the price increases of Dubai oil exchanged over the spot market and on Peso-Dollar exchange rate fluctuations. Moreover, they deny the existence of a cartel, alleging that they merely follow the movements of world oil prices. They claim these even as they are minimally affected by prices in world markets and even as they are able to trade in the same currency between subsidiaries,” the opposition lawmaker stated.
“Even when international oil prices slumped in 2015, the corresponding downward adjustment of local oil prices was hardly commensurate with the price movement in the international oil market,” he said.
Citing studies conducted by independent economic research institution IBON , Zarate said the prices of Dubai crude at US$55.4 per barrel, with exploration costs at US$3-4 per barrel, production costs at US$7-8 per barrel, and royalties at US$8 per barrel, indicate a staggering US$35-37 per barrel (63-67%) in taken home “super profits by the transnational oil corporations.” “This is only for the initial stage of production; more is expected to be raked-in from hidden transfer-pricing between company subsidiaries,” Zarate warned.
“In lieu of this we filed House Bill 4712, which requires the institution of a centralized procurement system of all imported crude oil and refined petroleum products, which includes the creation of buffer supplies to cushion consumers against drastic increases in petroleum prices,” added the Deputy Minority leader.
“Mas maganda sana kung ito ang itinutulak ni Department of Energy Sec. Alfonso Cusi para matulungan ang mamamayan at hindi palaging pulitika ang inaatupag (It would have been better that Department of Energy Sec. Alfonso Cusi focused on helping the people instead of dwelling too much into politics),” he said. (MELVIN SARANGAY)