Oil firms should explain price hikes to the people - Palace

(Updated 12:19 p.m.) MANILA, Philippines – Malacañang on Tuesday called on the major oil players to explain directly to the people the reason behind the series of price hikes, even as it described as Congress' prerogative the proposal to have the books of oil firms opened by the Commission on Audit. "Congress is perfectly within its prerogative to take action to protect the interest of the people," said Press Secretary Jesus Dureza on the proposal voiced by House Deputy Minority Leader Roilo Golez. "It is incumbent upon oil industry players to explain to the public – in the language ordinary people can understand – issues that touch their day to day lives. Public information in so critical a sector like oil is crucial. But it must be in the language of the masa," Dureza added. Over the weekend, the three oil giants heeded President Gloria Macapagal Arroyo’s request for a P1.50 reduction on the prices of diesel to cushion the effect of the surging prices of basic commodities in the Philippines. On Monday, world oil prices rose back to P130 a barrel, prompting the same oil firms to consider rejecting future requests from the President to cut back in their price increases. Real intervention For his part, opposition Sen. Panfilo Lacson also supported calls to have oil firms' books subjected to a full audit, saying it is high time the government showed real intervention amid high fuel prices. "It's time for government to intervene in accordance with existing laws to check on possible exploitation and abuse by so-called businessmen whose only passion in life is profit," Lacson said. He noted such an audit, along with the exercise of prosecutory powers by a joint task force of the the Justice and Energy departments, is in accordance with the oil deregulation law. In contrast, Lacson said President Arroyo's move to roll back diesel prices by P1.50/liter betrayed her tendency to "intervene" only when her political survival is at stake. "What we Filipino taxpayers and consumers need is a government that will protect us from abuse all the time, not only when its political survival is in danger," he said. Lacson urged the task force to throw the book at the oil firms if it finds evidence of profiteering at Filipino consumers' expense. "The oil companies deserve such audit and eventual prosecution of their executives, should evidence warrant," Lacson said, saying the Energy department has failed to check on the possible abuses of oil firms. Petron Corporation on Tuesday also welcomed Golez's proposal. "OK lang sa amin magpa-audit sa COA (We are open to an audit by the Commission on Audit)," Virginia Ruivivar, Petron corporate communication manager, said in an interview with radio dzBB's Mike Enriquez. In filing House Resolution 659, Golez said COA has the power to audit “semi-private and private companies" based on a Supreme Court ruling in December 2006. The so-called Big 3 oil firms are Petron Corporation, Pilipinas Shell, and Chevron Philippines. "In view of the unquestionable impact on the national economy of the price of oil set by these oil companies, a public audit of the financial operations of these oil companies is imperative," Golez said. SGV audit The lawmaker from Paranaque said this power has been “affirmed" by the High Court when it directed the Energy Regulatory Commission, through COA, to undertake a complete audit on the Manila Electric Company (Meralco). The SC ruling was in relation to Meralco’s “provisionally-approved rate increases and unbundled rates to confirm whether or not 2003 rate increase by the Lopez-owned power distribution firm was merited." In welcoming the proposed COA audit, Ruivivar said that just recently, they had their books looked at by private auditing firm SGV (Sycip, Gorres, Velayo & Co). "We were just audited by SGV dahil hiningi ito ng DOE para makita kung ano ang katotohanan sa financials ng oil companies (In fact, we were just audited by SGV (Sycip Gorres Velayo & Co) as requested by the Department of Energy to see the truth in the financials of the oil companies)," Ruivivar said. She said the result of the SGV audit showed that returns of the oil companies are not unreasonable and is lower compared to other industries. She said their books are open and the government auditors can always scrutinize it. "Our books are open they can always scrutinize the books because Petron is a listed company, we submit our reports regularly to the SEC (Securities and Exchange Commission) as well as the Philippine Stock Exchange," Ruivivar said. She also defended the company from accusations that they are raking in profits at the expense of the Filipino people. "Nagsasakripisyo talaga kami, kung makikita n'yo mas mababa ang kinikita namin ngayon kesa last year. Hindi kami pwede mag-operate at a loss kasi may mga utang kami (We are also sacrificing, our profit now is lower than last year. We cannot operate at a loss because of our loans)," Ruivivar said. She said they invested $300 million for their refinery and they are investing in another project which they believe would benefit local consumers. "Hindi talaga natin maitatanggi na kailangang bawiin ang mga cost namin especially sa crude cost kasi paano kami makakapag-imbak kung mauubos yung kapital namin (We cannot deny that we need to recover our cost especially the crude cost. How can we store our supply if we run out of capital)," Ruivivar said. - Mark Merueñas and Amita Legaspi, GMANews.TV