IBON pushes for release of oil price report

MANILA, Philippines - IBON Foundation Inc., a non-government research group, is pushing for the release of an oil price review report amid escalating fuel prices.

In a statement, IBON criticized the delay in the release of the Independent Oil Price Review Committee’s findings on oil overpricing.

Last January, the Department of Energy (DOE) created the IOPRC, which earlier committed to release the results of the study in July.

“As more oil price hikes are reportedly looming this week, IBON reminds government of its pronouncement that it will look into allegations of overpricing by big oil firms,” the research group said.

IBON said that after a series of rollbacks from April to June, oil prices have increased anew and have totaled P5.88 for diesel and P7.15 for gasoline since July.

Year-to-date, net increase for gasoline hit P4.43 per liter while diesel recorded a net decrease of P1.56 per liter, data from the DOE showed.

“The review panel seems to be facing difficulties in gathering sufficient data to disprove reports of overpricing by the oil firms,” IBON said.

The IOPRC said there is no delay.

“There is no delay. The committee convened late, and the terms of reference allows a three-month extension,” IOPRC Chairman and University of the Philippines economist Benjamin E. Diokno said in text message.

“We asked for a one-month extension, which was granted. The report will come out on or before the end of August,” Diokno said.

Under RA 8479 or the Downstream Oil Industry Deregulation Act of 1998, the DOE organized the panel in line with its transparency efforts to provide the public information on the real scenario on local pump pricing and to determine if oil companies have been accumulating excessive profits.

The study, which might be used in aid of legislation regarding the oil industry, aims to determine if oil pricing has been fair.

“Any findings on profiteering will be futile if government chooses not to regulate the oil industry, as it is doing now,” IBON said.

Specifically, the government should build its own capacity and expertise to be involved in the oil industry, the research group said.

IBON said its past studies have shown that oil players Pilipinas Shell Petroleum Corp., Chevron Philippines Inc. and Petron Corp. have been overcharging beyond what is justified by movements in international crude prices.

An independent study was earlier undertaken in 2008. It was co-authored by the Sycip, Gorres, & Velayo, and the University of Asia and the Pacific.

In its summary, the report said that the adjusted return on equity figures for Petron and Shell do not appear extraordinary when compared with benchmark market interest rates.

Under RA 8479, oil firms can price their products based on market forces so as to encourage competition.

The deregulation law also prohibits the government from intervening or influencing the pricing schemes of the oil companies.

However, the government, through the DOE, has monitoring powers. For monitoring purposes, the DOE has requested the firms to report to the department before adjusting their prices.