What consumers pay for at the pump price?


A year ago, fuel products opened with an increase of .40, .30 and .40 per liter for gas, diesel and kerosene. This year, fuel prices opened with an increase of 1.85 ,2.40 and 1.85 a liter for gas, diesel and kerosene. The year to date increases in 2021 ended with an increase of 17.65, 14.30 and 11.45 a liter for gas, diesel and kerosene. Yet in all these price adjustments, the consumers are not informed of what they are paying for at the pump price except the absolute amount on a per liter basis.

Last year, the oil companies thwarted the regulation which required them to disclose to consumers the breakdown of the retail price. The oil companies sought the courts and the latter enjoined the implementation of the unbundling of oil prices. 

What goes to the pricing at the pump price? What do oil companies pay for when importing oil products?

The single biggest component of retail pump price is the cost of the raw material or crude oil. This constitutes approximately 50% of the cost of the motor fuel. The balance constitutes refining costs, excise and local taxes, foreign exchange, transportation, retail costs including the oil company margin. Yet, when oil companies adjust their prices on a weekly basis, the adjusted prices are identical regardless of the oil company. This is difficult for an ordinary consumer to accept. 

  Unbundling of prices is not new in the economy. Section 38 of the Electric Power Industry Reform Act (EPIRA) provides for unbundling of electricity rates. The best examples are the Meralco bill for Meralco consumers and the receipts for electric cooperatives.

They show us the components of what we pay per kWh of electricity we consume. 

This is also true in our water concession bill. The bill shows us what the consumers pay. 

None of these data appear in the receipt to the consumers by the oil companies. I am sure that oil companies, when importing oil products ask the details and breakdown of what they pay for. Therefore, the oil companies can   inform their consumers of the components of the pump price.  I am asking why are oil companies able to get away without disclosing the information.

This must be changed!

Atty. Vic Dimagiba, President, Laban Konsyumer Inc.

Email at [email protected]