Uniform prices: Proof of oil cartelization?

I gassed up my car the other day and yes, I was still paying P7.69 more per liter than what I pay for the same shitty fuel from the Big 3 oil companies in the gas stations of Manila or in Davao! The price of diesel fuel was still pegged at P31.50 vis-à-vis Manila at P25.75 in all of the Big 3 oil gas stations. Unleaded fuel was pegged at P39.44 vis-à-vis what Manila gas stations sell at P31.75 and that’s a huge difference of P7.69 per liter of fuel. What totally amazes me is the indifference of Cebuanos about this huge injustice done by the Big 3 oil companies. Even the militant jeepney drivers that suddenly stage Metro-wide strikes don’t seem to care anymore. In short, the Big 3 oil companies are getting away with murder!

This issue was raised during a Cabinet meeting held in Cebu a few weeks ago when Cebu Gov. Gwen F. Garcia threw this question that the PhilExport had requested her to ask. When President Gloria Macapagal Arroyo (GMA) turned to Department of Energy (DoE) Secretary Angelo Reyes, his immediate but off-the-cuff remark was that oil prices in Metro Manila were lower than Cebu because of the “oil smuggling.” This raised many eyebrows in the Cabinet because there was smuggling of oil in this country and no one was stopping it? Good thing that Gov. Gwen Garcia suggested that she’d look into this problem by herself and that elicited a few sighs in the Cabinet!

One of the reasons “kuno” why oil prices are higher in Cebu than in Davao is the cost of transportation. Hellooow! Davao City is even further than Cebu from the main depots of the Big 3 oil companies! Well, last week, Gov. Garcia raised the question of Cebu’s high fuel cost to the Department of Justice (DoJ) Task Force for Oil Deregulation chaired by Undersecretary Jose Vicente Salazar and, surprise, surprise, officials of the Department of Energy (DoE) now had a ready answer even before the PR or communications officers of the Big 3 could issue their statements!

As expected, the DoE gave the Cebu Governor almost exactly the same reasons that the Big 3 oil companies also gave. Now isn’t this what we call “collusion”? What is totally wrong in this country today is that our government i.e. our Maritime Regulators always side with the shipping companies even if they have already suffered many deadly ship disasters!

The same thing is true with the Land Transportation Regulators that almost always side with the big bus operators at the expense of the passengers. Consequently, it is not surprising to me that the DoE is openly siding with the Big 3 oil companies! The least that DoE could do is demand from the Big 3 oil companies a proper explanation and perhaps order them to “level the playing field!” But why is the DoE scared of the oil companies?

Right now, we only have Gov. Gwen fighting to correct this injustice… and to think it’s almost election season already and we haven’t even gotten a peep from any of the so-called Presidentiables who will soon be swooping down to Cebu asking for the votes of Cebuanos!

Perhaps it is time for Undersecretary Salazar and the Task Force on Oil Deregulation to demand for the opening of the books of the Big 3 oil companies because I’m willing to bet that when we look into the profit columns, the fuel income from Cebu will be so glaringly higher than Metro Manila or that of Davao. Who knows, the DoJ Task Force might just uncover a landfill, not just a can or garbage of worms, but a landfill of other issues.

Call it coincidental that as I was doing this piece my “E-Spy” told me that there’s a humongous secret within the Big 3 oil companies…. that allegedly, they could not account for some billions that were supposedly earmarked for the Oil Price Stabilization Fund (OPSF) from the years before the Oil Deregulation Law existed. Hmmm, surely the Department of Finance (DoF) knows about this and if it really runs to billions (I heard it’s in the neighborhood of P4B) that’s a lot of cash that’s either hoarded or worse, could have gone into some corporate guy’s pockets when it should be due to the coffers of the government? Pray tell us that this information isn’t true!

Please don’t get me wrong, from day one I was a staunch supporter of the Oil Deregulation Law and I still believe that it is far better than the OPSF. But with what is happening in Cebu today, it proves that the greed of the Big 3 oil companies has to be reigned in. This is why I support the call by Socioeconomic Planning Secretary Ralph Recto for a review of the Oil Deregulation Law in order to punish the unfair practices of the oil companies, whose prices if you didn’t know are very uniformed, which only proves that there is a cartel in existence! The reason for the Oil Deregulation Law is to allow oil companies to compete with each other. But instead, they sat down together and made all their fuel prices almost exactly the same!

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For email responses to this article, write to [email protected]. Bobit Avila’s columns can also be accessed through www.philstar.com. He also hosts a weekly talkshow entitled, “Straight from the Sky” shown every Monday only in Metro Cebu on Channel 15 on SkyCable at 8:00 in the evening.