Independent players cut disparity in fuel prices

CEBU, Philippines - The Independent Philippine Petroleum Corporation Association yesterday assured Cebu Governor Gwendolyn Garcia that their oil prices in Cebu are already the same or even lower than the other parts of the country.

The assurance was made by Fernando Martinez, chairman and chief executive officer of Eastern Petroleum Group and the concurrent chairman of the IPPCA. 

Martinez however does not speak for the major oil players in the country-Shell, Petron and Caltex, whose pump prices in Cebu remain high compared to Manila and Mindanao.

Garcia earlier complained before the Department of Justice against the big three oil companies in the country because of high prices of petroleum products in Cebu compared to Manila and Mindanao. Garcia found out that oil prices in Cebu are higher by P3 to P5 per liter.

Martinez attended yesterday’s 442nd founding anniversary of the Province of Cebu and told Garcia his good news.

Martinez said that the entry of new players has brought down the prices of diesel in Cebu to the same level if not lower by as much as 50 centavos and almost the same in gasoline.

“This is the fruit of competition and I congratulated Governor Gwen because she openly complained against the huge disparity sa presyo sa Cebu,” Martinez told reporters.

He said that the transport cost is not more than P1.50 per liter and if there is difference it should be a maximum of P1 to P1.50 from Manila price.

“This is important development that demonstrates the fact that when you open a particular market of competition and that is the result of oil deregulation, it will eventually lead to more competitive pricing,” he said.

Martinez said that the Cebuanos are entitled to that kind of reasonable pricing as envisioned by oil deregulation law and that there is no place anymore for a monopoly of a cartel-like operation where there is so much disparity in prices.

Eastern Petroleum is operating in Cebu in wholesale basis since January this year trying to influence the price by giving back sales to some industries, truckers, shipping companies.

It planned to operate retail outlets in Cebu as soon as they could find partners to operate at least 20,000 to 40,000 liters per month.

“A difference of P1 to P1.50 from Manila price could be justified because of transport but amazingly today because of bulk handling and efficiency and competition, the price is even the same and even lower than Metro Manila,” Martinez said adding that Cebu is the largest consumer of gasoline outside of Metro Manila.

Garcia welcomed the news and the Cebuano businessmen will be glad about it.

“I believe especially our business sector will be very very happy with this including the riding public including all of us motorists who have to load up on our vehicles,” she said.

Garcia said now she sees the benefits of having the fuel providers that are not controlled only three big companies who agreed the prices by themselves.

“Whereas if you have these independent players coming in and they are now proving to be really quite competitive in an atmosphere where there is competition, it is the consumer that benefits,” Garcia said.

Garcia met Martinez a year ago and asked him to help Cebu bring fuel price down.

“He came back today to give that very welcome news for Cebu,” Garcia said. (FREEMAN)