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Manila Bulletin- DOE backs price fixing case vs oil companies

DOE backs collusion, cartel raps vs. oil firms

Updated November 18, 2019, 10:57 AM

By Myrna M. Velasco

While it is questioning its inclusion as a respondent in the complaint, the Department of Energy (DOE) forthrightly stated that it is fully backing the filing of collusion, price-fixing and collusion raps against the oil companies before the Philippine Competition Commission.

“We welcome LKI’s (Laban Konsyumer Inc.) call for the PCC to look into claims of price-fixing and collusion,” the energy department stressed.

The advocacy group LKI of lawyer and former Trade Undersecretary Victorio Mario Dimagiba filed the collusion and price-fixing complaint against Chevron Corporation, Petron Corporation, PTT Philippines, Pilipinas Shell Petroleum Corporation, Total Philippines, Seaoil, Phoenix Petroleum, Unioil, Jetti Petroleum, Eastern Petroleum Corporation, City Oil, Filpride Energy Corporation, Clean Fuels, TWA Inc. and PetroGazz Ventures Corporation as well as the DOE – that was on account of their weekly price adjustments at domestic petroleum pumps.

The DOE, nevertheless, argued that its inclusion in the complaint was “patently wrongful allegation”, because its posting of oil pricing formula on its website — as anchored on the previous formula of the defunct Energy Regulatory Board – was just intended to enforce transparency and for the public to be informed how price movements are generally calculated in the domestic downstream oil sector.

“The DOE, through its Oil Industry Management Bureau (OIMB), has always been dedicated to its mandate to protect the public against cartelization and predatory practices by closely monitoring actual oil price movements, specifically to prevent unreasonable adjustments and abuses,” the department emphasized.

It further noted that whenever discrepancies arise, the DOE-OIMB has in fact been “consistent in issuing show-cause orders to concerned oil companies requesting them to provide pertinent documents and a formal explanation on how they arrived at their respective oil price calculations.”

Dimagiba for his part stipulated that “I am filing the complaint because the respondents, by preponderance of evidence, enter into an agreement substantially preventing and restricting competition and continuously commit price fixing, collusion and cartel.”

On the periods covered in the complaint, he claimed that the respondent-oil companies had sent their weekly notices to the DOE “of the adjusted prices of gasoline, diesel and kerosene with the same amount and effectivity, and implemented on the same date.”

Dimagiba raised to the competition body that the oil firms violated several provisions of the Downstream Oil Deregulation Act as well as other relevant laws and policies restricting connivance of industry players on fixing their prices as passed on to the consumers.

He said the oil industry players violated Section 14 (a) and (c) of Republic Act 10667 or the National Competition Policy in “restricting competition as to price,” and other forms as well as in the form of trading that they have been engaging in.

Additionally, Dimagiba alleged that the oil companies breached Section 11 or the anti-trust safeguards of the Oil Deregulation Law, thereby restricting fair competition and had supposedly triggered cartels and monopolies in the industry.