GMA orders crackdown on erring LPG traders

President Arroyo has ordered the Department of Energy (DOE) and the Department of Justice (DOJ) to join hands in prosecuting erring traders involved in illegal liquefied petroleum gas (LPG) activities.

Energy Secretary Vincent S. Perez said they were instructed by the President to work together with the DOJ to put an end to these crimes.

"This concern was taken up during our Cabinet meeting (Tuesday). I have raised comments regarding the smuggling of petrochemical products and crimes committed on LPG products," he said.

Perez said it was high time for the government to intensify its crackdown on LPG-related illegal activities. "We would particularly zero in on those that are engaged in so-called underfilling of LPG cylinders," he said.

Perez said another LPG-related crime that they are looking into, is the illegal tampering of LPG seals.

Apart from slapping fines, he said they are looking into the possibility of confiscating LPG cylinders of merchants found violating the law.

He said they would also go after persons operating illegal refilling plant which are allegedly engaged in underfilling.

Former Energy Secretary Jose Isidro Camacho, who is now finance secretary, had earlier raised the idea of increasing the penalties imposed on LPG violators.

Camacho had contemplated coming up with a list of those that are not paying fines and to make this public, but, up to now, the names of the violators still have to be revealed.

Perez admitted a tough approach against erring LPG traders is one of the most effective way to addressing this issue.

Aside from the DOJ, the DOE has also signed a memorandum of agreement with the Department of Interior and Local Government (DILG) to assist the DOE in policing illegal practices in LPG trading.

In 1999, there were reports of underfilling which is basically the sale of 11-kilogram LPG cylinders, which are actually less than the required volume.

Based on a DOE investigation, this underfilling is being practiced by unscrupulous dealers and resellers regardless of product brand.

An LPG task force, was also created to recommend possible guidelines in setting up rules and penalties with regard to various malpractices in the sale of LPG products.

The local LPG market has been growing at an annual rate of 10 percent since the industry was deregulated in 1998.

The new players already accounted for a 25-percent market share in 2000 from 18.9 percent in 1999. The new players plan to increase this share to 35 percent this year. In Mindanao, the LPG market is reportedly experiencing a 15-percent annual growth rate.

The bulk of LPG sales, however, remain in the hands of the Big 3 industry players – Petron Corp. Pilipimas Shell Petroleum Corp. and Caltex Philippines Inc. Other players in the LPG sector are Total Gaz, Pryce Gas, Liquigaz, Manila Gas, Petronas and Mobil Gas.