Oil industry players to police own ranks

The New Petroleum Players Association of the Philippines (NPPA) and the Petroleum Institute of the Philippines (PIP) with the Federation of the Petroleum Dealers’ Association of the Philippines (FFDAP) has signed a memorandum of agreement (MOA) allowing them to police their own ranks to curb illegal practices in the industry.

Energy Secretary Vincent S. Perez, who witnessed the signing, welcome the initiative of the industry players as this will help the government in its role of implementing Republic Act 8479 or the Downstream Oil Industry Deregulation Law.

"The government on its own cannot do everything to achieve the goals of a deregulated market. We need the cooperation of all the stakeholders in the industry and that involves keeping an eye on any trade malpractices," Perez said. "The industry has decided to self-enforce among themselves because they initiated it to make sure everyone is committed to good practice."

Under the MOA, the oil players agreed to support the full deregulation of the downstream oil industry to promote a truly competitive market that will bring about fair prices and safe products as well as adequate and uninterrupted supply of petroleum in the country.

The industry stakeholders also agreed to adhere to the existing laws and regulations promulgated and implemented by the Department of Energy (DOE) and other government agencies that prohibit malpractices such as petroleum product dumping - the selling, offering to sell and unloading of branded petroleum product of retail outlets without prior authorization or knowledge or the supplier - the petroleum product smuggling - the transacting of petroleum products with unpaid duties and taxes.

The MOA will pave the way for the proper monitoring of petroleum products’ standards and quality.

This, as the new oil players revealed the proliferation of small gasoline pumping stations all over Metro Manila and adjacent provinces, which they believe are not accredited by the DOE.

Under the agreed monitoring scheme, the oil firms are expected to look after petroleum product adulteration, wherein products are sold without meeting the specifications of the Philippine National Standard. An example of which is mixing water in the petroleum product.

Mislabelling and misrepresentation of the product by selling a certain product under a different brand name other than the retail outlet is considered another illegal activity.

The MOA also enjoined industry players to engage in predatory pricing or the selling or offering to sell any oil product to the market at a price below costs to destroy competition or eliminate a competitor.

A Liquid Fuel Monitoring Task Force will be created to fully monitor these activities. The task force will be supervised by DOE’s Energy Industry Administration Bureau.

A steering committee composed of one representative from each of the parties will be created ad will be responsible for setting up the working organization of the task force.