Gwen, Big 3 face off in clarificatory hearing

CEBU, Philippines - Cebu Governor Gwendolyn Garcia and the executives of the three big oil companies faced each other yesterday during the clarificatory hearing on the charges of the alleged overpricing of fuel in Cebu.

The joint task force on oil deregulation, which is composed by the Department of Energy and the Department of Justice, is headed by Justice Undersecretary Jose Vicente Salazar and with members state prosecutors George Yarte and Diosdado Solidum and DOE Undersecretary Roy Kymako.

The preliminary hearing, which was conducted at the conference room of Camp Lapu-Lapu, Cebu City, was regarding the complaint for overpricing of petroleum products filed by Garcia and various business chambers against the three oil companies.

Last May Garcia sued Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron Corp. for violation of Section 11 Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 which penalizes cartelization and predatory pricing of petroleum products.

Salazar vowed that they will expedite the resolution and file appropriate charges against those found liable of violating the Oil Deregulation Act.

 “This is the first time that an LGU files a complaint against the oil companies,” Yarte said, adding that there was no pressure from the both parties as they are just doing their job. 

  Garcia, in an opening statement, told the panel that the oil companies committed the offense of cartelization as fuel prices in Cebu are higher compared to Davao and Metro Manila.

She said she cannot accept the arguments of the big three oil companies that they will bow down to small players in Mindanao.

In their charge sheet, the complainants attached the comparative study done by the CCCI on fuel prices in the cities of Davao, Cagayan De Oro, Iloilo and Metro Manila. The business chambers based their study on a survey of gas station pump prices as of May 15, 2009.

Garcia confirmed the panel that she did not personally conduct the survey used in the filing of case. 

Garcia told the panel that she finds it “strange” that the three competitors have been “in harmony” with their fuel prices.

“It is strange that these competitors seem to be in harmony down to the numerical digit. Are they really competitors or soul mates in the prices?” asked Garcia.

When Yarte asked Garcia why she chose the three oil companies in filing the case she reasoned out she and Cebu business sectors sued them but no small oil players since the big three have all the resources to control prices in the market.

“Probably, it’s the big guys who dictate the small guys. We are asking why the Cebuanos suffer the consequences,” Garcia said, adding that being a businesswoman, she knows that price is not determined by market forces alone.

Mylene Santos, Shell downstream communications manager, said the three oil firms are transparent about their data and assured Garcia and the presidents of various business chambers she will furnish them with the necessary documents about their operations.

  The oil companies manifested to answer in writing in relation to the panel’s query why the cost of fuel transport from Manila to Mindanao is cheaper than in Cebu.

  Capitol spokesman Rory Jon Sepulveda also submitted additional queries in response to the counter-affidavit of the three oil companies.

The legal counsels of the oil companies also manifested to answer in writing the clarificatory questions posed by the panel, including the pump prices of diesel and gasoline on May 15, 2009 in Cebu, Cagayan de Oro, Davao, Iloilo and Metro Manila.

Salazar also requested the oil companies to answer in writing the actual cost of oil shipment point to Cebu, Metro Manila and Davao as of May 15.

The oil companies were also required to present the receipt of their sales, cash disbursement of bulk shipment, delivery receipt of fuels and gasoline, sales invoices, logs and records, computations of costs of fuel transport, purchase of refined petroleum, among others.

 Yarte said the since the provincial government submitted further documents only yesterday, he said the panel will still have to assess the papers before requiring the respondents to answer them.

Yarte told reporters that there will be no more hearings to be conducted and the rulings and the recommendations will now be based on the documents that the two parties submitted to them. — Garry B. Lao and Mitchelle Palaubsanon/BRP   (THE FREEMAN)