Mikey proposes oil price cap in disaster-hit areas

MANILA, Philippines - Pampanga Rep. Juan Miguel “Mikey” Arroyo has proposed a price cap on petroleum products in calamity-stricken areas to prevent unscrupulous businessmen from taking advantage of the disasters.

Arroyo, chairman of the House committee on energy, discussed the proposal with Trade Secretary Peter Favila during the recent Legislative and Executive Development Advisory Council (LEDAC) meeting.

The eldest son of President Arroyo said Favila was “amenable” to the idea.

An audit of the oil companies is not enough, Arroyo stressed.

Arroyo said he is planning to discuss the proposal with the Departments of Energy (DOE), Trade and Industry (DTI) and Justice (DOJ).

“As chairman of the House energy committee, I will set up a dialogue with representatives from the DTI, DOE, DOJ and the oil players on how this mechanism can be done and how it will work,” he said.  

Arroyo stressed that the business sector should take notice of the government’s effort to prevent unscrupulous traders from reaping profits at the expense of their countrymen.

“And I hope that by merely broaching the idea of this mechanism to control oil prices during calamities, it would serve as a warning to unscrupulous businessmen not to exploit the situation,” Arroyo said.

The Pampanga lawmaker explained that while oil firms are given leeway under the oil deregulation law, “it is not a blanket authority for oil firms to control the pump prices of oil products, much more during crisis.”

“The oil deregulation law should not be mistaken as a device which oil companies can use to take advantage of the market situation especially in times of calamity or crisis,” he said.

Arroyo said this was the primary concern behind his proposal to create special mechanisms under the oil deregulation law.

“(This is) not only to ensure that oil companies will not be able to exploit the situation in times like this but also for the government to be able to manage oil prices in calamity stricken areas,” he added.

Lawmakers led by Nueva Ecija Rep. Edno Joson and Anakpawis Rep. Joel Maglunsod called on Energy Secretary Angelo Reyes to quit for failing to impose a price cap on petroleum products when President Arroyo placed the country under a state of calamity in the wake of the devastation caused by tropical storm “Ondoy” and typhoon “Pepeng.”

Joson and Maglunsod said Reyes should quit his post for failing to do his job and for defending the oil firms.

Reyes earlier shot down suggestions, including an order from no less than Mrs. Arroyo, to place a cap on the prices of petroleum products.

Reyes said he would be violating the provisions of the oil deregulation law in implementing a price ceiling on petroleum products, even after the declaration of a state of calamity.

Maglunsod said Reyes violated the law when he failed to monitor the prices of oil products during calamities.

The latest oil price increases of 25 centavos per liter is the last thing overburdened and disaster-stricken Filipinos need, Arroyo added.

“I deplore in the highest sense the latest round of oil price hikes implemented by the oil firms. It’s not only insensitivity at its crescendo but it’s also the most despicable thing to do,” he said.

Arroyo said the oil firms – particularly Shell, Chevron and Petron – were worse than “thieves in the night who sneak in the cover of darkness to prey on helpless victims.” Petron has yet to increase oil prices.

“They should give the people some breathing space to recover from the worst calamity our country had experienced in decades,” Arroyo added.

He insisted that oil companies should even implement a price rollback, especially after the National Economic and Development Authority (NEDA) discovered that prices of gasoline are overpriced by at least P6 to as much as P8 per liter.

At a little past midnight Monday, Pilipinas Shell hiked its pump prices by 25 centavos. A few hours later, Seaoil followed suit.

Chevron announced it was also increasing by 25 centavos the pump prices of its petroleum products. Petron and other small industry players have yet to announce their price hikes.

“I call on these oil firms to implement a full rollback of the pump prices of fuel, the true price of which they are trying to hide in their books of accounts that they have been consistently trying to block from being audited,” said Arroyo.