Oil firms flagged for shortchanging consumers

Published December 7, 2021, 2:16 PM

by Myrna M. Velasco

The country’s oil companies are being flagged for allegedly ‘shortchanging consumers’ by implementing lower-than-expected price rollbacks at the pumps, prompting stronger calls for the unbundling of pass-on costs of petroleum commodities.

According to Bayan Muna Representative Carlos Isagani Zarate, the price cuts to be enjoyed by consumers would have been heftier “if only the prices are unbundled and transparent to the public.”

Advocacy group Laban Konsyumer Inc. (LKI) also noted that when prices are on rollback, the cost swings are often lower; and if there are price hikes, the oil firms are implementing higher-than-estimated adjustments.

In the past five weeks of price rollbacks implemented by the oil companies, even the Department of Energy (DOE) has been noticing that price reductions are often smaller by P0.10 to P0.30 per liter; and if there are price hikes, these are also often higher by P0.05 to P0.15 per liter.

However, oil companies will just reason out that they are covering other cost components – like market premium or ethanol costs, but they have not been providing concrete evidence and they are not submitting report to the DOE to back up their claims.

Because of the apparent price maneuver of the oil companies, even the DOE is now leaning on to the possibility of a return to a regulated set-up or at least unbundle the price components passed on at the pumps so the oil companies to make these firms accountable to the Filipino consumers.

“It was baloney for the oil companies to claim alleged market premium in the purchase of gasoline that resulted in rollback cut of at least P0.30 per liter for gasoline,” LKI President Victorio Dimagiba stressed.

He thus called on the DOE to hold the oil companies accountable and demand that the full rollback due to consumers, not just this week but even in the past four weeks, to be reflected in entirety at their pump prices.

Zarate similarly noted “when there are rollbacks, oil companies are shortchanging consumers, but when there are price hikes, they are charging more.”

In the lawmaker’s view, it is just a prudent step on the part of the oil firms to lay down to the public the segregated or itemized cost components they have been passing on at the pumps. But if the oil companies would continually fail in doing that, the suspicion that they have been resorting to ‘price trickery’ will persist.

Zarate conveyed it is off-putting that when the oil industry players are asked for explanation on lower-than-warranted rollbacks, they would often refuse to provide full or understandable explanation. They tend to hide under the dictum ‘market forces’ in the deregulated downstream oil sector to justify the rates.

With the alleged dubious tactics of oil pricing, Zarate urged the oil firms “to stop blocking moves to unbundle the price of oil products in the spirit of transparency – for the public to know their pricing scheme.”

He further called on the oil companies to support House Bill 10386 or the proposed fuel cost unbundling policy, “so that consumers would finally see the oil pricing processes.”

Zarate added “this is all in the spirit of transparency since the country is still under a pandemic and every peso means so much more – especially to the already economically burdened consumers.”

 
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