Inclusion of consumer rep urged in Oil Deregulation Law review panel

Senate Minority Leader Aquilino Pimentel Jr. has called for the inclusion of a consumer representative in the independent panel reviewing the oil deregulation law.

Pimentel said that it was ironic that the sector most affected by the fluctuations in the price of oil was not included in the five-member team created by the Department of Energy (DOE) to review Republic Act 8749 or the Downstream Oil Industry Deregulation Law.

"You have regulators, organized transport groups, oil dealers, you even have academicians in the panel but you do not have consumers — the people who pay for high oil prices out of their own pockets," Pimentel said.

"These are the people most affected who cannot pass on the increases in fuel prices because they are at the end of the line," he added.

After Energy Secretary Vince Perez said that he favors a review of the law, Malacanang expressed support for the review in response to the clamor of the various sectors.

The five-member panel is composed of Carlos Alindala, former commissioner of the Energy Regulatory Commission; Peter Lee Yu, dean of the College of Economics of the University of Asia and the Pacific; Aberto Suansing, secretary general of the Confederation of Land Transportation Organization of the Philippines; Merceditas Garcia, president of the Petroleum Dealers Association of the Philippines and Joey Leviste, former executive director of the Petroleum Board.

The team was given three months to review, evaluate and submit the recommendations of its study to the DOE Secretary.

Pimentel conceded that the oil industry has demonstrated signs of competition but he lamented that the oil companies’ actions, particularly on the price hikes, reveal their true nature as a cartel.

"This is something that RA 8479 sought to prevent but failed to do so miserably," he said.

He said that even though the players in the downstream oil industry now number 362, this figure is insignificant since only a few dictate the prices of oil.

"The problem is that we have not instituted the regulatory infrastructure, the monitoring mechanisms, as well as the kind of sanctions and penalties for oil companies that simply find loopholes in our laws," Pimentel said.

Prior to the deregulation of the oil industry, the government was forced to shell out billions of pesos in subsidies in order to maintain the price of fuel at levels agreeable to the consumers.

However, these subsidies placed a huge burden on the finances of the government and became detrimental to the country’s fiscal position.

With deregulation, the idea was to allow market forces to dictate the price of fuel which could mean higher or lower pump prices at any given time.