DOE, DOJ probing oil firms for price hike amid calamity

MANILA, Philippines - The government is investigating oil firms Pilipinas Shell and Seaoil for raising their pump prices earlier this week, when the country has just started to recover from the devastation from two killer typhoons, Justice Secretary Agnes Devanadera said yesterday.

In a press conference, she said the joint deregulation task force of the Department of Energy and Department of Justice would summon the books of accounts and financial records of Shell and Seaoil to determine if the firms violated the Oil Deregulation Law after they raised the prices of their gasoline, diesel, and kerosene products by 25 centavos per liter on Monday.

“It was a great source of disappointment,” Devanadera said.

The two firms allegedly veered away from the compromise made between the government and all oil players in the country during a consultation last Monday.

Devanadera and the members of the task force met with executives of all oil companies in the country, including the Big 3 (Shell, Chevron Philippines and Petron Corp.), to discuss issues on supply and prices of petroleum products in the aftermath of the natural disasters.

Representatives of all oil firms, she said, promised not to increase their prices.

She said the oil firms agreed to shoulder the additional cost of fuel transport to Baguio City, which was badly affected by typhoon “Pe­peng.”

The oil firms also told the task force that while local oil prices depend on the movement of prices in the world market, current oil prices overseas remain manageable.

“They told us that they were keeping prices reasonable and that there would be continued supply in the market. So we were very surprised when we saw in the evening news that some of the oil companies increased their prices,” Devanadera said.

Because of this, they decided to investigate the two oil firms instead of just consulting with them.

“We will have to look at all provisions of the oil deregulation act, predatory pricing, unreasonable pricing and cartelization. It (market) is deregulated but the task force is given power (to investigate) under the same law,” she said.

She added that there are already many complaints against the oil firms, like the suit filed by Cebu Gov. Gwen Garcia on May 21, 2009 against the Big 3 on allegations that fuel is overpriced in the province.

She said the task force has the power to investigate even without a formal complaint.

“As a Filipino, this should be the time that we cope with the challenge. This is an appeal not just to the oil companies but also to other sectors. Our people are suffering and no amount of law we can use as defense will forgive us for their suffering,” she said.

She said that while the two oil firms exempted some areas affected by the typhoons, the government still has to make sure that the companies complied with the law.

Shell and Seaoil said price adjustments would not be implemented in areas battered by typhoon Pepeng such as Pangasinan, Cagayan, Isabela, Nueva Ecija, Abra, La Union, and Baguio City.

Devanadera said the task force will also study if other oil firms need to be investi­gated.