DoE-DoJ task force to quiz oil firms on P3/liter diesel hike

MANILA, Philippines - The government will summon representatives of oil companies on Monday for them to explain the reported P3 per liter increase in diesel prices despite the drop in global fuel costs. Department of Energy Secretary Angelo Reyes on Saturday said a newly formed task force of the DoE and the Department of Justice would look into the new round of oil price hikes, which is the 20th time this year. "Ngayon meron tayong task force, nag-assign tayo ng prosecutors na may inherent power to summon representatives and issue summons for documents, sa Lunes papatawag natin (Now that we have a task force we will assign prosecutors to summon and issue summons for documents. We'll sic it on them Monday)," Reyes said in an interview on dzRH radio. Chevron Philippines, Pilipinas Shell Petroleum Corp., Flying V, and Unioil Petroleum Phil. confirmed that they would be increasing the prices of their fuel products. The increases will be effective at 12:01 a.m. Saturday for Flying V and 6 a.m. for Unioil and Shell. Chevron will follow suit at 12 noon. The increase in the prices of fuel products has become a weekly occurrence in the country. The P3 per liter increase in diesel this weekend is so far the biggest hike imposed by oil companies. Prices of gasoline are also up by P1, while that of kerosene jumped by P1.50 to P2.00. The prices of diesel and kerosene have gone up 20 times since the start of the year. Total price of diesel per liter has gone up by P24, while that of kerosene rose by P22.50. Due to speculation At least 20 percent of present fuel prices may be due to speculation on world oil prices, which local oil firms are passing on to Filipino consumers, according to militant think tank IBON Foundation. IBON said any oil price increase due to speculation is hard to quantify, but is significant, as shown by the steepness of increases in the past year. The group cited a 2006 study by the United States Senate Permanent Subcommittee on Investigations that estimated that as much as 30% or more of the prevailing crude price at the time was due to speculation-driven purchases. "Applying this to how the cost of crude oil accounts for around 75% of the local pump price of fuel (based on the DOE estimate of crude/product costs in diesel and gasoline prices of the oil industry and importers) implies that over 20% of local pump prices are due to speculation-driven overpricing," IBON said. With this finding, IBON said there is a need for "genuine regulation" of the local oil industry to curb local oil companies' profiteering. "The ease with which local oil firms can pass on this manipulated increase in global oil prices on top of built-in overpricing underscores the need for genuine regulation of the domestic oil industry to, at the very least, rein in such excessive profiteering at the people's expense," it said. IBON said the monopoly oil transnationals already rake in billions of super-profits from inflating the price of their oil. This monopoly pricing has been further bloated since last year by increasing speculation in world oil market, it said. "It is likely that the current bloating of oil prices due to speculation today will be even more than estimated by the 2006 US Senate report inasmuch as speculative investments in energy commodities today are double the US$100-150 billion levels around the time the report was made. This has already been acknowledged by among others even the Saudi Arabian and German governments, US government officials and the International Monetary Fund (IMF)," it said. Meet with oil 'bosses' After being prodded about the government's perceived inaction on oil price hikes, Reyes on Saturday said he would also meet with the "big bosses" of the oil firms, but he did not say when or where. "I'll meet with them, kami na lang ang hepe-hepe na lang. Ako na lang para responsible, I'll take responsibility (I'll meet with the bosses, I'll take responsibility)," he said. Reyes also denied he made himself inaccessible to media, saying, "hindi tayo nagtatago (I'm not hiding)." He received a tongue-lashing on air from anchor Jose Taruc Jr, who said Reyes' cell phone rang twice then was shut off. Reyes went on air after Taruc, through the radio, aired his complaint to Press Secretary Jesus Dureza and reminded him of a Malacañang directive to make Cabinet officials accessible at all times. - GMANews.TV