Solon rejects proposal of Big 3 on Oilex

Bataan Rep. Enrique Garcia Jr. rejected yesterday a compromise formula allegedly agreed upon by oil companies Petron, Shell and Caltex and the Department of Energy (DOE) and stood pat on his belief that the establishment of a national oil exchange is the only solution to keep oil prices in the country reasonably low.

Garcia cited a survey indicating that a significant majority of the people believe the government can take steps to bring down the prices of gasoline and other petroleum products.

"The establishment of Oilex is the only way we could source and buy our country's total requirement of refined petroleum products (gasoline, diesel, kerosene, fuel oil, liquefied petroleum gas, among others) at the lowest possible price," Garcia said in a statement.

Garcia said Oilex can do it by requiring the Big 3 to compete, through bidding and negotiation (term contract), with the rest of the world for the right to supply the country's requirements.

Garcia said the latest Pulse Asia survey shows that 67 percent of the people believe the government can take steps to bring down the prices of gasoline and other refined petroleum products.

"In much more positive and specific terms, the survey shows that dominant 58 percent of our countrymen believe that the Oilex being proposed by Rep. Garcia is the answer to the ever increasing and unreasonable rise in oil product prices," the statement said.

Garcia pointed out that what is actually being proposed by the Big 3 (with the blessing of the DOE) "involves only one change, albeit critical and far-reaching."

Garcia said the 'cartel' proposes that "instead of requiring that our total oil requirements be coursed through Oilex, we would now allow them (Big 3) to sell directly to end-consumers.

"Effectively, this would relegate the national Oilex to a national oil company, another new player that would have to compete with the Big 3. The said national oil company will have to start from scratch. If at all, it would be a long pull for the proposed compromise national oil company. Meanwhile, the Big 3 monopoly will remain, the OPEC cartel pricing on crude oil will go on unabated, the transfer pricing on crude oil will continue, the local Big 3 overpricing can recur," Garcia pointed out.

Garcia added that with the recent admission of Petron chairman Jose Syjuco that the Oilex could indeed mean lower prices of gasoline and other refined petroleum products, "it is now clear that the Big 3 and DOE Secretary Mario Tiaoqui have been intensely objecting to the Oilex because they are afraid of true market competition among the more than 40 oil refineries and traders worldwide."

Garcia added that for the sake of the greatest good of the greatest number, they should truly compete with many others and "be satisfied with not getting much more than they really should."

Garcia further claimed that these entities will not lose in their investments nor be deprived of profits even as he twitted Tiaoqui that "no one in government should even try to assure and protect the overpricing and superprofits of oil cartel and monopoly."