Ex-NEDA chief Recto testifies in court, affirms overpricing by oil firms

MANILA, Philippines - Former socioeconomic planning secretary Ralph Recto appeared yesterday before a court to reaffirm an earlier pronouncement that oil products are overpriced by as much as P8 per liter.

In his testimony before the Manila Regional Trial Court Branch 26, Recto also accused the so-called Big 3 – Pilipinas Shell Petroleum Corp., Petron Corp., and Chevron Philippines Inc. – of operating as a cartel, engaging in price fixing, and violating the anti-trust provisions of the Oil Deregulation Law.

Recto drew scathing remarks from Energy Secretary Angelo Reyes when he first voiced the accusations. The Big 3 controls about 85 percent of the market.

The court was hearing a petition to stop the oil firms from raising their prices.

The country, Recto said, consumes about 120 million barrels of petroleum a year, of which 70 million barrels is crude oil and about 50 million barrels refined.

He said based on the data, only about 40 percent of the products should be priced based on the MOPS (Mean of Platts Singapore), while 60 percent should use Dubai Crude as the pricing benchmark.

He said oil company executives appear to be conferring with one another on oil pricing because adjustments occur almost at the same time with the same rates.

He said the Department of Energy appears to be not using the automatic price mechanism provided in the law to check unjustified price increases.

“You can open the law and read the law for yourself. In fact during the transition days, it suggests an automatic price mechanism. That’s one way of determining the oil price if it is fair or reasonable under the oil deregulation law,” said Recto.

Contempt

Meanwhile, Judge Silvino Pampilo Jr. asked counsels of the three oil giants to explain within five days why they should not be cited for contempt for snubbing yesterday’s hearing.

The three lawyers – Jannet Regalado of Shell, Erwin Herrera of Chevron, and Gener Asuncion of Petron – walked out of the Sept.11 hearing after Pampilo allowed Raul Concepcion, chairman of the Consumer Oil Price Watch (COPW), to testify on the alleged overpricing by the oil companies.

“This is indirect contempt, which has a penalty of six months imprisonment or a fine of not more than P10,000,” Pampilo said, referring to the lawyers’ non-appearance.

“The court has the jurisdiction to grant or deny the Temporary Restraining Order on the Big 3 oil companies on weekly oil price increases,” he said.

The Big 3 oil companies’ lawyers were questioning the jurisdiction of the Manila RTC over the issue of the price increases.

“An injunction may be granted by the court where the action or proceeding is pending, therefore, this court has jurisdiction to hear the application for Temporary Restraining Order with Preliminary Injunction, However, whether to grant or deny the same is subject to the discretion of the court and after hearing and presentation of evidence,” Pampilo said in an order dated Sept. 17.

“It does not speak well of them as officers of the court. To us, they already have waived their right to cross-examine the witnesses (Recto and Concepcion),” lawyer Vladimir Cabigao of the Social Justice Society said.

“The court was kind to them to give them their day. That’s why the court reset the cross examination to Oct.12. But in reality, they have waived their right to cross-examine the witness,” he said.

“The court can resolve the case already based on the testimony of the witnesses,” Cabigao said. 

“They have surrendered because their secrets have been known. It only means that they could not refute or rebut the testimony of our witnesses,” he claimed.

He said he expected DOE Secretary Angelo Reyes to speak for the oil companies. “We have Raul Concepcion and Sec. Ralph Recto, while the oil companies have Sec. Reyes as spokesperson,” he said.

“It would be an opportunity for us to confront him and ask him why he is not doing his job as Energy secretary. Based on the testimony of Sec. Recto, if the overpricing of P8 could be lowered, jeepney fares would go down also. The computation would be discussed but it could be lower by P2,” he said.