Petron tells gov’t to resolve oil price row

Petron Corp., the country’s largest oil firm, reiterated yesterday that it had nothing to hide as its financial statements are open for the government to scrutinize. The publicly listed oil refiner made the statement amid a dispute over price controls that has forced competitor Pilipinas Shell Petroleum Corp. to go to the court to seek a temporary restraining order. Petron said it was not making excessive profits, pointing out that it reported a P4-billion loss in 2008. “Petron has always adhered to transparency and fairness in the pricing of its petroleum products. We have always maintained that as a publicly listed company, our quarterly financial and operating records are open and can be scrutinized by anyone," Petron President Eric O. Recto said in a statement. Former National Economic and Development Authority director-general Ralph G. Recto early this year claimed that oil prices were overpriced by as much as P8.00 per liter at retail stations, triggering a dispute with oil firms and Energy chief Angelo T. Reyes, who said there was no solid basis for such a computation. The Arroyo administration has ordered pump prices in Luzon frozen at Oct. 15 levels following two storms that had devastated the island. Executive Order (EO) 839 issued two weeks ago cited Section 14 of the Oil Deregulation Law, which said that “in times of national emergency, when the public interest so requires, the Department of Energy may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any person engaged in the industry." A Department of Energy-Department of Justice (DoE-DoJ) task force is monitoring compliance with EO 839. The Petron president said: “We have nothing to hide and we are prepared to open our books to the DoE-DoJ Taskforce so that they can finally determine whether we are indeed profiteering." “There are many groups and personalities who continue to ride on the oil price bandwagon causing confusion and undue expectations among the public. We hope that they (DoE-DoJ Taskforce) act on this matter immediately," Eric O. Recto said. “In 2008, Petron reported a net loss of almost P4 billion because of the extreme volatility in oil prices. Again, this proves that at the very least, we are not making undue profits," he added. Petron had stated that it might incur losses of up to P1.5 billion in the fourth quarter due to EO 839. The oil company said the losses could go even higher if international oil prices rise beyond forecast levels. The Energy department has called a meeting today to assess the effects of EO 839. Last Thursday, Pilipinas Shell filed a petition with the Makati Regional Trial Court for the lifting of EO 839. Pilipinas Shell, in a 78-page “Petition for Prohibition, Mandamus and Injunction" filed Thursday against Executive Secretary Eduardo R. Ermita representing the DoE-DoJ Joint Task Force, and Energy Secretary Reyes, asked for the immediate issuance of a temporary restraining order against the continued implementation of the said EO “on grounds of constitutionality." Various oil companies last week came out with an open letter asking for a meeting with President Arroyo to discuss EO 839. The Bangko Sentral ng Pilipinas as well as five business groups -- the Philippine Chamber of Commerce and Industry, Management Association of the Philippines, Makati Business Club, Federation of Philippine Industries, and the European Chamber of Commerce of the Philippines -- have all voiced misgivings over EO 839. After Oct. 15, the only price adjustments oil firms were able to make were an increase of P1.25 per liter for premium gasoline, P0.85 per liter for regular gasoline, P2.00 per liter for diesel, and P1.50 for kerosene. Oil companies said the EO effectively stifled increases which should have been implemented for the past two weeks due to rising import costs. -- Jose Bimbo F. Santos, BusinessWorld