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Friday, September 30, 2016

Mindanao Oil players Urged to Explain Unusual Price Reductions

Wazzup Pilipinas!

The Department of Energy (DOE) is asking the oil players in Mindanao to explain the unusual price reductions in gasoline products that may be breaching provisions under the existing law.

Based on the monitoring of the DOE-Mindanao Field Office (MFO), the price adjustment of the oil companies in Mindanao from the period of 30 August to 6 September 2016 was a huge PhP3.00 rollback, hence attracting the attention of the agency.

While price rollbacks like this are a welcome development for the consumers, the DOE cautioned that sudden and sustained huge decreases in oil prices might qualify as an “anti-competitive behavior” under the Oil Deregulation Law.

This market behavior puts both the smaller oil players and the consumers at a disadvantageous position in the long run. Smaller oil players may actually lose its market share and end up closing, allowing the remaining oil players the chance to dictate prices to the detriment of the consuming public.

Relative issues brought about by this market behavior include the peddling of petroleum products using in the “bote-bote” scheme and the alleged smuggling of oil products from nearby countries.

Currently, the DOE-MFO has already been coordinating with local government units (LGUs) concerned and the Bureau of Fire to eliminate the “bote-bote” scheme while also discouraging consumers from patronizing such activity as this may endanger public safety and health

On the alleged smuggling of oil products, the DOE is now in talks with the Bureau of Customs as this may hurt not only the oil industry players, but also the economy of LGUs in Mindanao and the rest of the country. Taxes are lost, affecting the delivery of basic services to our people.

Moreover, the DOE is closely coordinating with the Department of Justice (DOJ) for the possible convening of the DOE-DOJ Task Force to determine any violations of the law.

The DOE has given assurances of its continuous vigilance to protect the welfare of the energy consumers.

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