Task force recommends lifting price controls

Price controls imposed in the wake of devastating storms could soon be lifted following recommendations by concerned Cabinet officials. Acting Justice Secretary Agnes VST Devanadera said a Palace-appointed task force of which she is a member had urged President Gloria Macapagal Arroyo to end a controversial cap on Luzon fuel prices. To address concerns in still-recovering areas, the task force — composed of the Justice and Energy departments — backed an oil industry proposal for a "package of discounts," she added. Ms. Devanadera also claimed the Trade department had recommended the lifting of price controls on basic commodities, but this could not be immediately confirmed with Trade Secretary Peter B. Favila. "We have submitted to the office of Executive Secretary Eduardo Ermita a recommendation for the lifting of Executive Order 839 together with the proposal of Petron and Seaoil to give a package of discounts on identified areas where the effects of the typhoons are still severely felt," she said. BusinessWorld was shown a draft copy of a proposed executive order detailing discounts of up to P2 per liter offered by oil companies. In a letter to the task force early this week, Petron Corp. President Eric O. Recto said "we ask that EO 839 be lifted and we propose a more targeted and focused calamity assistance program that would directly benefit the typhoon victims and achieve the intended aims [of the directive]." Seaoil President and Chief Executive Francis Glenn Yu, meanwhile, said: "While retail prices may be adjusted weekly, whether upward or downward, depending on movements in international oil prices, the discount levels will be maintained in calamity areas until November 30, 2009." Both were not immediately available for comment but Roberto S. Kanapi, vice-president at Pilipinas Shell Petroleum Corp. which had asked a court to junk the Palace-mandated fuel price freeze, said: "Shell welcomes this positive development as the lifting of the EO will normalize the petroleum business operations." Malacañang, meanwhile, confirmed that it had received the task force’s recommendation, but said Mrs. Arroyo was still weighing her options. "The President is still studying the recommendations. She has not yet signed any order lifting Executive Order (EO) 839," Press Secretary Cerge M. Remonde told reporters in a text message on Thursday. EO 839, issued on October 23, required oil firms to cap prices of petroleum products in Luzon to October 15 levels. It was issued a few days after oil companies raised pump prices by as much as P2 per liter. Malacañang cited a provision in the oil deregulation law which allowed the government to cap prices during times of calamity. Storms Ondoy and Pepeng a few weeks earlier had devastated parts of the main island of Luzon, particularly Metro Manila and rice-growing areas. The order was widely criticized by business groups, which said it would lead to a supply shortage as oil firms hold off from importing due to higher world prices. - Ira P. Pedrasa with a report from Gerard S. dela Peña, BusinessWorld