Posts Uncategorized

Lki position paper on unbundling of prices of fuel products

May 28, 2018
Mr. Donato D. Marcos
Department of Energy
Re: Draft Department Circular on Oil Price Unbundling
Amidst the big time price hikes the past weeks, the above Circular is a challenge for the Department of Energy to gain the trust and confidence of an informed consumers. As we consistently advocates, the consumers deserve to be informed even while the industry and the Department of Energy both make public announcements that the industry operates in a deregulated market. However, there are bills filed in Congress to regulate the retail market of the oil industry. The Oil Industry Deregulation Law empowers the Department of Energy police powers to file cases against prohibited retail activities like profiteering, cartel and other forms of abuses by the industry.
Over the weekend, oil companies have posted big time price discounts in service stations in Fairview, Quezon City as well as in Greenfield Road in Santa Rosa, Laguna. Whatever the business motivation of these dealers are, this sends a message that the oil price hikes are ? bloated ?, and that the dealers are still making money despite the big discounts on a per liter basis . We attach in this email the photos of the price discounts.
Further, the Circular should be able to justify the basis of the identical or similar weekly price adjustments of the oil companies, the new players and independents as well as the big variance in retail prices of some trading areas like Baguio City vs. La Union and areas in Mindanao, which are subject of ongoing inquiry in the House Committee on Energy .
Considering that the Circular should have been issued in the 1st quarter of 2018, we propose that the Unbundling of the Base Price under Article IV be moved up to March 31, 2018, instead of December 31, 2017. This may have been an oversight by the Department. The volatility of the prices of crude oil and petroleum products in the international market no longer reflects the reasonableness of a 6 month old Base Data.
Thank you for the invitation to participate in the public consultation.
Very truly yours,
Atty. Victorio Mario A. Dimagiba, AB, LLB, LLM