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Oil price review 70-percent done, more questions on oil overpricing still unanswered

Sunday, May 13, 2012

Oil price review 70-percent done, more questions on oil overpricing still unanswered


Progressive organizations, business and transport leaders are dismayed at the fact that the government, up to now, has no system to monitor or explain how the oil companies profit and how much. Neither does it have a benchmark for defining excessive profits and penalties for such.
By MARYA SALAMAT
Bulatlat.com

MANILA – “We’re looking for a good monitoring method; I think that by now you should have that already. What I can’t understand is why there is still no clear monitoring system till now,” Claire dela Fuente, former singer and now leader of a bus operators’ association called IMBOA, remarked during a public consultation of the Independent Oil Price Review Committee. It is the second public consultation held by the committee, who promised to do this monthly until it submitted its report by July.

Dela Fuente had listened to the consultation at length before speaking. “I have lost interest in attending meetings like this,” she shared. She had been to many such meetings and consultations before, and she asked, “Until now, where is the system?” Dela Fuente said that even in their transport business, which is a lot smaller than the business of refining and distributing oil, they have a monitoring system that tells them their cost and profit projection.

“We’re talking of the oil companies’ accumulation of profits,” she said. But after many consultations like last Monday, she said, the government still cannot monitor or explain how the oil companies profit and how much, really.


(Photo by Marya Salamat / bulatlat.com)
Worse, during the public consultation, it transpired that the Philippines do not actually have a (legal) definition of excessive profit. In the law, dela Fuente pointed out, “there is no penalty for excessive profits, if there is such given its lack of definition in law.” This means that even if the ongoing review does find out that there is excessive profit taking on the part of the oil companies, it would likely be useless and toothless.

The oil price review committee is supposed to determine if the oil companies’ profits are excessive or not. Even if the committee said, last Monday, that they are already 60 to 70-percent through and they could submit their “scientific report” on July, they still would not reveal the trend of their findings, citing the terms of reference of the review. They are also set to meet with oil companies to get their side, along with other data on oil company’s “financials.”

Oil price reviewers’ limits, self-imposed or otherwise

In last Monday’s consultation by the Independent Oil Price Review Committee held at the Department of Energy, leaders of civil society and business received little to no reassurance that the much complained about oil overpricing, oil deregulation law or government neglect in developing local energy sources may be finally and decisively addressed.

The thrust of the review, said Dr. Rene Azurin, member of the review committee, “is not to determine whether prices are fair or not but if it’s fairly set, if it’s accurately set compared to world market, (or) whether local prices reflect international prices.”

This delineation followed a lengthy sharing of leaders from business and bus transport operators who, like Dela Fuente, had expressed disappointment with government inaction on oil prices and oil overpricing..... MORE

SourceBulatlat.com

URL: http://bulatlat.com/main/2012/05/10/oil-price-review-70-percent-done-more-questions-on-oil-overpricing-still-unanswered/

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