Partylist seeks unbundling prices in downstream oil products’ sales


WITH eight consecutive oil price hikes, a partylist group is pushing for the passage of a bill instituting the unbundling of prices in the sale of petroleum products in the downstream oil industry.

In House Bill (HB) 10386, Bayan Muna Reps. Carlos Isagani T. Zarate, Ferdinand R. Gaite and Eufemia C. Cullamat said they filed the bill last Thursday because they see Republic Act (RA) 8479 or the Downstream Oil Industry Deregulation Act of 1998 as “a failure.”

The lawmakers said that for more than two decades since its enactment, RA 8479 failed to fulfill its promise to “ensure a truly competitive market under a regime of fair prices” through the liberalization and the deregulation of the local downstream oil industry.

“Not even the pandemic crisis can stop oil price hikes,” the solons said in the bill’s explanatory section.

In a separate statement, Zarate challenged oil companies to “stop blocking moves to unbundle the price of oil products in the spirit of transparency, for the public to know their pricing scheme.”

“They should instead support HB 10386 so that consumers would finally see the oil pricing processes,” the Davao-based solon said. “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 ordinary already economically burdened consumers.”

Zarate said gasoline will increase by P1.90 to P2.00 per liter, diesel by P1.40 to P1.50 per liter and kerosene by P1.30 to P1.40 per liter.

The lawmaker said they are strongly urging the Department of Energy (DOE) to be more pro-active and support this bill “in the midst of this crisis aggravated by the Covid pandemic gravely affecting our people, especially the poor.”

“They can even lobby to the president to classify this legislation as urgent along with other bills that would stop or at least mitigate oil price hikes,” Zarate said. “The big time oil price hike again brings to the fore the issue of possible overpricing by oil companies. This also shows the need to unbundle or detail their price of fuel per liter.”

The lawmaker further explained that “except for the international price of oil, nobody knows the actual expenses of oil companies in selling fuel such as refining cost, storage, transportation, salaries and advertising cost.”

“The oil companies must inform DOE and the public of this actual cost, so that we will know if they are overpricing or not,” Zarate said.

According to him, the DOE has the power to demand these reports from oil companies.

Section 15 (a) of RA 8479 grants the DOE the power to gather and compile appropriate information concerning―and to investigate from time to time―the organization, business, conduct, practices, and management of any person or entity in the oil industry.

“For more than 20 years after the oil deregulation law, the government does not know the actual cost of fuel and is, therefore, not capable of determining predatory pricing or overpricing. This is the tragic folly of deregulation,” Zarate said. “For 20 years the consumers could have overpaid billions of pesos in overpriced fuel. Worse, these also led to price increases of other products using fuel. It’s about time we put an end to this.

The lawmaker added that “there is nothing confidential about the actual cost of producing oil.”

“We have to put a stop to this abuse of oil companies that have made life more difficult for the poor who have to pay more for fuel, for transport fare, and for LPG just because there is no transparency in the oil industry,” Zarate said. “This bill is most timely now in the time of crisis and pandemic that every centavo and peso count in the shrinking budget of consumers.”

Under the bill, any person who violates any of the provisions of this proposal shall suffer the penalty of 3-months to 1-year imprisonment and a fine ranging from P50,000 to P300,000.

The bill said whenever any of the violations described above is committed by a corporation or association, the president and each one of its agents or representatives in the Philippines (in the case of a foreign corporation or association), who shall have knowingly permitted or failed to prevent the commission of such offense, shall be held liable as principals thereof.

Also, the bill gives the DOE and Congress the power to suspend or cancel the acknowledgement to engage in any activity in the downstream oil industry, the Certificate of Compliance or the Standard Compliance Certificate, respectively, of the non-compliant oil company, retail outlet, LPG re-filler and dealer, thereby suspending or cancelling the further processing of any application or request to the DOE in relation to its downstream oil operations.

Image courtesy of Nonie Reyes

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