Review of Oil Deregulation Law pushed

MANILA, Philippines - The Congressional Planning and Budget Department (CPBD), the think-tank of the House of Representatives, said the government should review the Oil Deregulation Law to help curb smuggling in the country.

The CPBD said there should be a provision in the law that would effectively deter oil smuggling by imposing stiffer penalties such as cancellation of business permit, higher fines and increased number of years of imprisonment.

However, the CPBD thumbed down proposals to repeal the law, saying that this would mean slapping the public with more taxes.

In a letter addressed to members of the House, CPBD said that repealing the law would mean going back to price intervention in domestic oil markets.

“This would require reviving the oil price stabilization fund (OPSF) to be funded again by taxpayers that the government, given its fiscal record and outstanding debts, simply cannot afford,” the CPBD said.

Citing data from the National Economic and Development Authority (NEDA), the CPBD said that government’s subsidy to the OPSD has swelled to P8.3 billion in 1998 alone.

This, the think-tank said, was a major contributor to the government’s deficit and indebtedness.

However, the CPBD said there is still a need to review the law. “This would still be very important in order to help reduce oil smuggling, enhance the transparency of domestic oil pricing and discourage anti-competitive behavior.”

It also said that there should be a provision in the law that would specifically require the submission of books of accounts and financial documents to ensure that oil companies are not involved in profiteering.

Furthermore, the CPBD said the government should also include the Commission on Audit (COA) in the agencies that monitor the oil industry aside from the Department of Energy.

“The COA as an independent commission will lend credibility and will fortify the taskforce capability to scrutinize financial documents,” the CPBD said.

The CPBD also urged Congress to strengthen the anti-trust provisions of the law, saying that these should be amended to redefine the concept of anti-competitive agreements and abusive behavior.