Senators press anti-trust law vs oil cartel
Senators Manuel Roxas and Juan Ponce Enrile pushed yesterday for the passage of an anti-trust law that could be used to discipline companies engaged in anti-competitive behavior such as collusion and other restrictions to free trade, particularly in the oil industry.
Roxas, chairman of the Senate trade and commerce committee, had designated Enrile to head a sub-committee to draft an anti-trust law. Enrile has been advocating for an anti-trust law and is the author of a similar measure filed but not approved in the 13th and 14th Congress.
“We will make the anti-trust legislation stronger, that way, aside from the visitorial powers on company books, there will be a law to be used to hit abusers,” Roxas said.
The Senate committee on trade and commerce met with trade officials and representatives of oil companies, transport groups and consumer groups to determine why there remains a prevailing rise in the prices of fuel when the peso has greater buying power compared to the US dollar.
Energy Secretary Angelo Reyes said that the current levels of fuel prices are 71 centavos higher in August this year than in the same period last year.
Reyes raised no objection to the proposals for Congress to review the Oil Deregulation Law but he also stressed the need for Congress to appropriate additional budget in case of regulation since the government will shoulder the subsidies to be given to the oil companies.
“If we say that the government sets the prices, theoretically that is okay. Then the government would have to be ready to subsidize (and set up) the price destabilization fund,” Reyes said. “I have nothing against regulation but government must appropriate the funds for it.”
Despite world oil prices at a record-high level of $99 per barrel from about $70 per barrel in 2006, Reyes said the strong performance of the peso helped soften the price increases.
“If we are at P55 to a dollar, the pump price of gasoline would have been P8 more. From the current price of gasoline, P43.95 per liter, it would have been P51.95 per liter,” Reyes said.
After the hearing, Roxas also called for a multi-pronged approach to solve the problem of the domestic fuel price hikes.
Roxas said several options include the crafting of anti-trust legislation, amendments to the Downstream Oil Deregulation Law, and reviewing all import duties and taxes imposed on crude oil and finished oil products.
He said they would ask the Department of Finance, Bureau of Customs, and the tariff commission for a break down of the tariff, taxes, and other fees imposed so as to determine if consumers can be given relief once taxes are reduced.
The DOE secretary has visitorial powers under the Oil Deregulation Law, which should have been one mechanism to check against abuses of oil companies, but previous energy secretaries have refused to use this authority, Roxas said.
Oil industry experts, however, said that the foreign exchange rate and world oil prices are not the only factors involved, and that premium and freight charges in the importation of oil must also be considered.
“For example, a refinery in
Transport sectors hit what they perceived as a cartel in the oil industry, and called for a review, even a repeal, of the Oil Deregulation Law.
“They said before that the Oil Deregulation Law will push oil prices down due to the entry of new players that will spur competition. But there is no free competition existing, which is the premise of the law. There is a need for regulation,” said George San Mateo, secretary-general of the Pinag-Isang Samahan ng mga Tsuper at Operators Nationwide.
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