Pampanga Rep. Juan Miguel Arroyo, House Committee on Energy chairman, on Monday said the proposed amendments to the Oil Deregulation Law will ensure fair and transparent pricing of fuel products amid the global supply crunch.
In the committee report, Arroyo said a task force composed of the Department of Energy (DOE) and the Philippine Competition Commission (PCC) shall be created to investigate any unreasonable increase in the prices of petroleum products.
Arroyo said this is among the strong anti-trust safeguards in the measure to ensure fair competition and prevent cartels and monopolies from dictating prices.
“The amendments will prevent any unreasonable price increase, particularly over and above the indicative retail price as determined by the Oil Industry Management Bureau (OIMB) of the Department of Energy,” Arroyo said.
Under the bill, members of the task force will be tasked with the drafting of rules and guidelines to ensure efficiency, promptness, and effectiveness in handling the cases.
“Any report from any person of an unreasonable increase in the prices of petroleum products shall be immediately acted upon,” the bill stated.
The committee report defines unreasonable price of petroleum products at the pump as unjustified, unsupported by evidence and/or unexplained by the implementing downstream oil industry participant.
The committee report, which substituted House Bills 10505, 4550, 4711, 5172, 5186, 7928, 8764 and 10386 and House Resolutions 9, 390 and 1651, aims to “ensure the availability of adequate supply of petroleum products in the country at reasonable prices.”
Another salient feature of the measure is the requirement for refiners, importers and bulk distributors to maintain a minimum inventory requirement on a per company, per depot and per product basis.
Industry players will also be required to submit an annual downstream oil industry development plan; submit their respective retail prices upon implementation of any price adjustment; observe the unbundling of retail prices to reflect the landed cost of crude oil or petroleum products at the time of purchase or the contracted price, port charges as well as refining, storage, handling, marketing, transshipment costs and other costs.
The substitute bill also stipulates that the volume of sales and required inventory stock are not covered by trade secret confidentiality and will be made part of any report to the DOE that it may require.
Meanwhile, the minimum inventory requirement will be measured in number of days the available supply will last. All refiners, importers and bulk distributors will be required to maintain at least 30 days of available supply at any given time, according to the substitute bill.
The bill also provides criminal and administrative fines and penalties for the violation of its provisions.
Marikina City Rep. Stella Quimbo proposed that a provision in the substitute bill be further revised to clearly reflect that the price monitoring system of the Department of Energy would be based on the unbundled retail price of petroleum products.
“Unbundling the retail price of domestic petroleum product does not run counter to the principle of deregulation, and is, in fact, a tool to ensure its effectivity. Thus, the DOE must be mandated and capacitated to monitor the unbundled retail prices,” Quimbo said.
Quimbo also proposed to grant the President the power to suspend or decrease fuel excise tax rates when Dubai crude oil based on Mean of Platts Singapore (MOPS) pricing reaches USD80 per barrel.
“Finally, while we remain steadfast in our commitment to deregulation and competitive markets, we must also pass a measure which can be responsive to the needs of our people in times of shocks, calamities or wars. As we are constrained by the effects of supply and demand in a deregulated regime, we should not be left without the ability to have quick recourse when such effects result in the suffering of many Filipinos,” she said.
Source: The Philippines News Agency
