Upon the request of Mayor Beng Climaco, the City Government team and other stakeholders met with the Department of Energy (DOE) Tuesday morning as the city continues to work to review and find solutions to the high prices of gasoline and diesel in Zamboanga City.
“The pandemic surge plus the increase of fuel cost is really going to be a burden to our residents… ang gobierno po ay handang gawin kung ano ang dapat para makatulong sa mga transport sector at sa ating mga mamamayan,” Mayor Beng Climaco said in her opening statement during the virtual meeting.
Presenting the results of their analysis, DOE Oil Industry Management Bureau head Atty. Rino Abad emphasized that while global oil prices have continuously surged since the start of this year, local issues such as freight costs and a high industry intake may have also contributed in pushing oil prices in the city to a higher cost versus the prevailing prices in the region.
Referring to global oil prices, Atty. Abad said the increasing trend is due to factors of global demand and supply, which is controlled and restricted by OPEC (Organization of the Petroleum Exporting Countries), as well as import costs and fees.
“It’s not only happening in Zamboanga City, it’s happening everywhere in the Philippines and the global arena. This is actually an increasing trend,” Atty. Abad explained.
Freight cost issues, on the other hand, can be due to a lack of an import terminal – storage depots for oil, other fuels, and petrochemical products – in Zamboanga City which leads to significant transshipment costs.
“This has to be accounted for,” said Atty. Abad.
The DOE also noted that the city’s industry take – which refers to operating costs throughout the downstream oil industry chain plus profit of oil companies and retailers – is high at 12.82.
“It must be noted that the local cost of doing business may also be reviewed with the retailers to justify the remaining differential cost,” said Atty. Abad, adding that it is important to “un-bundle” the industry take with local retailers in the next meeting as well as delve deeper into market competitiveness amongst players.
Moving forward, the DOE recommended for city government to convene its economic cluster to meet with major oil companies and propose the establishment of a direct import terminal in Zamboanga City, to hold a business meeting with local outlets and retailers, to engage with the Philippine Competition Commission (PCC), and to touch-base with neighboring LGUs such as Dipolog to study and implement best practices.
Mayor Beng Climaco immediately directed the City Government team to act on the recommendations of the DOE to ensure the reduction of the pump price difference between ZC and neighboring cities.
She also expressed the city government’s support to the DOE’s call to amend our oil deregulation law to better manage and respond to price spikes.
(Jasmine Mohammadsali)
(Source: City Government of Zamboanga Facebook page)
