DoE sets public hearing on fuel price disparity

BACOLOD CITY, Philippines --The Department of Energy (DoE) has scheduled a public hearing in Bacolod on September 13 to tackle the high disparity of fuel prices in this city and the rest of Negros Occidental compared to other nearby cities and provinces.

This development was confirmed by Bacolod Rep. Evelio Leonardia, who arranged a meeting with DoE officials and seven Negros Occidental congressmen in his congressional office at the Batasan Pambansa in Quezon City last August 28. He said Energy Secretary Jericho Petilla had set the public hearing on the fuel disparity.

A six-man team of DoE, led by Zenaida Monzad, head of Oil Industry Management Bureau, led the presentation on fuel to Leonardia and other congressmen, Reps. Leo Rafael Cueva (2nd district, Negros Occ.), Jeffrey Ferrer (4th district), Alejandro Mirasol (5th district) and Mercedes Alvarez (6th district).

Representative Alfredo Benitez (3rd district) said he was not able to attend the briefing because of a prior commitment, but reiterated his support to what had been agreed in the briefing, such as the conduct of a public hearing to be attended by local officials and stakeholders to discuss the issue on price disparity.

The fuel prices in Bacolod City and Negros Occidental are higher by more than P8 per liter compared to Manila, and by more than P10 per liter compared to Cebu City, Benitez said.

Another solution they are planning to implement, Benitez added, is to create a multi-sectoral task force to monitor the prices of fuel in Bacolod and Negros Occidental.

The task force, to be composed of DoE representatives, stakeholders, and local government officials, shall determine if there is an overpricing in fuel here, and, if proven, send a complaint against oil companies to the Department of Justice for proper sanctions and penalties.

Benitez had earlier filed House Resolution No. 179 seeking the creation of a multi-sectoral and independent Oil Price Watchdog in the Visayas to monitor and review the oil prices in Negros Occidental and the rest of the region. This will augment the works of the DOE which lacks the manpower, since its only office in the Visayas is based in Cebu, he said.

The watchdog will also propose necessary policy interventions to address unfair competition, said Benitez. "Because of the Oil Deregulation Law, we cannot command the prices, but as for the Congress' study, there is a way to define what is a reasonable price," he said. "Competition can possibly lower the price and theoretically, they are banking on the small players where they can help bring the price down."

In the briefing Wednesday, Monzada told Negros congressmen that the fuel disparity is also happening in all Visayan provinces except Cebu. The boom of construction and the competition of oil industry players in Cebu have brought the level of prices in their area, she said, adding that there were times when Manila and Cebu had prices below the suggested retail price.

DOE also said that the oil prices in Negros are the right and correct prices because the Manila prices are considered "depressed" prices or lower than what the oil companies intend to sell, Benitez explained

The stiff competition among oil companies in Manila compels them to adopt the so-called "depressed oil pricing" and to make up for the lost profit, the oil companies increase their profit margin in the provinces.

One option to counter this, Benitez said, is to entertain a "free enterprise" wherein in LGUs can get into the distribution side of gasoline. The DOE encouraged this practice, where it lends financial support to LGUs that wanted to put up gasoline station.

Public vigilance will also help lower the prices of fuel, Benitez said, because oil companies also monitor the public's reaction and action against fuel increase.

Last Tuesday, the three big oil companies have reduced their fuel prices in Bacolod. Petron, Chevron (Caltex) and Shell gas stations revealed that they were directed by their higher offices to impose the reduction in prices in the city. So while fuel prices increased by 60 centavos per liter nationwide, Bacolod diesel prices dropped by P1 per liter and gasoline by P3 per liter.

Fuel prices in the province outside of Bacolod were also lowered, but Negrenses are still clamoring for oil companies to further bring down the price disparity. (FREEMAN)