Oil Companies, Protest Groups Share Secret Wish

Remember the fable of the monkey and the turtle? The monkey thought he was punishing the turtle by throwing him to the river. Little did the monkey know that was just what the turtle wanted.

So the protest groups behind all these noisy nationwide transport strikes want to go back to the days of a regulated oil industry. If they think that will punish the oil companies and make oil product prices go down in spite of OPEC, they had better do some more thinking. Those protest groups should be more careful of what they wish. They just might get it. What will they do if that happens and the promised relief remains as elusive as now?

The oil companies make token noises about how inadvisable it is to go back to the bad old days. Free market, they always say, is the way of the future. But if you know the biggies in the oil companies a little bit more, you will be able to extract from them a longing for the regulated days as well.

I don't blame them. If the industry were still regulated under the rules prevailing just before it was deregulated, prices of key petroleum products would be higher by 50 centavos a liter on the average. Under a regulated environment, it is a lot simpler to get price increases. The Energy Regulatory Board just looks on two key factors: price of Dubai Light Crude and the peso to dollar exchange rate.

In other words, in a regulated environment, the oil companies will not be suffering what they call "under recovery." In his presentation before the Greenhills Walking Corp., Petron Chairman Joey Syjuco made it a point to say that he is not advocating a return to a regulated environment. However, he did sound a bit nostalgic. He pointed out that Petron made a return on rate base of between 8.8 to five percent during the regulated years and barely broke even (even registered a loss) during the deregulated years.

Actually, the deregulated regime would have made prices very attractive for consumers if the OPEC stranglehold didn't work as well as it did. The Big 3 as well as the new players have been cutting prices to protect and gain market share. But the OPEC situation made the market share strategy irrelevant as cash flow became more important.

Mr. Syjuco, in a separate interview with this columnist, views the situation as temporary and he expressed his belief that a deregulated environment is best in the long run. And in fact, it is. But in moments of exasperation, thoughts of going back to regulation must have crossed his mind. I am sure executives of the other oil companies feel the same way too.

It isn't propaganda at all, when Joey Syjuco flashes that graph showing local oil product prices as the lowest in the region. In Hong Kong, the highest, a liter of unleaded gasoline costs over P50. That's the reality of the market.

In fact, the local oil refiners could have diverted some of their products to the regional export market to take advantage of higher prices. That would have also mitigated the losses they are booking here. Under the free market system, they could have done that. But that would have resulted in shortages in this market, making our volatile political and social situation that more combustible.

Finally, let us have no illusions that our oil demand, measured at 1/2 of one percent of the world's, can have any impact even on regional market prices. We have to give guys like Joey, who was appointed by President Erap, the benefit of the doubt... that even with Petron's Arab partner, Joey and the Filipino Petron executives will still be looking out for the national interest the way Petron had always been expected to.

Going back to those noisy demonstrators and strike leaders who are demanding a return to the regulated oil industry... they and the oil industry may share a secret wish, but for different reasons.

It isn't just the cell phone companies that seem to be cheating the public on the matter of dropped calls. I received this e-mail from AMADO E. MAYO a land line subscriber from San Simon, Pampanga. His problem is very familiar to phone subscribers and it is about time the NTC acts more decisively to protect the public. Here is that e-mail.

My problem is similar to Mr. Tiu but the only difference is my phone line Digitel, with Internet service provided by the same company but with a different name-"Digitelone".

It is very hard to connect to Digitelone in my place and every time I connect or dial to Digitelone, I am charged usually two minutes (P1.50) even if I do not get connected. Most often, my PC monitor will give the message: "the computer you dialed is not answering" or "you have been disconnected to the computer you dialed" and I am charged.

I complained to their billing department as well as their office in San Fernando, Pampanga but they cannot give me a valid reason. My bill for not being connected runs as high as P500 per month. This is "highway robbery" to the highest extent!

I hope through your column this can be addressed properly by proper government authorities.

We hope so too.

Flagpole's ours

Received this e-mail from Jbaylon, a Filipino whose e-mail address indicates he is in Korea.

I read your column today and could not agree with you more on the issue of holding the Americans responsible for toxic waste clean-up in Subic and Clark. By the way, the Americans did NOT leave behind the flagpole at Subic. The giant flagpole was a project during the time of ex-SBMA chair Dick Gordon, who wanted it built in time for the APEC summit so the leaders could see the Filipino flag flying so proudly and so high.

Too bad we're just good at symbolism, though......

Last week, I carried a joke about lawyers being held hostages and how those holding them made the threat to release one lawyer every hour until their demands are met. Well, that joke came back to me this week via Globe Handyphone text, re written in the form of an Erap joke. Hay naku! People are releasing their frustrations with Erap jokes like this.

Here is the latest News Flash... President Erap was captured by communist guerillas and is being held hostage. A spokesman of the rebels threatened that unless their demands are met, they will be forced to release him.

(Boo Chanco's e-mail address is [email protected])