Manila: House leaders on Tuesday raised possible profiteering amid the sudden action of oil companies to quickly raise pump prices even while selling fuel stocks purchased earlier at lower prices, taking advantage of the ongoing crisis in the Gulf region.
According to Philippines News Agency, the concerns surfaced after oil companies implemented another round of fuel price hikes on Tuesday. This development coincided with discussions by the House Committee on Ways and Means, chaired by Marikina City Rep. Miro Quimbo, on bills that seek to authorize President Ferdinand R. Marcos Jr. to temporarily suspend excise taxes on petroleum products. The aim is to cushion Filipino consumers from surging global oil prices, which have been triggered by tensions in the Middle East.
Quimbo highlighted how the country's deregulated oil industry operates, noting that companies base pump prices on international benchmarks rather than the cost of existing inventories. This arrangement, he argued, may need to be revisited in light of the current crisis. He explained that oil firms follow movements in the Mean of Platts Singapore (MOPS), a regional pricing benchmark used across Asia, allowing them to raise prices even if their current stocks were purchased at lower prices.
Committee vice chair and Manila Rep. Rolando Valeriano remarked that the latest price hikes seem premature since the fuel being sold may still be part of inventories purchased before geopolitical tensions elevated global prices. He pointed out that the country still has about a month's worth of fuel supply, as confirmed by government officials.
Valeriano warned that applying higher prices to existing inventories could result in massive profits for oil companies, citing that each oil company depot with 5 million liters could potentially earn a net income of PHP100 million. Meanwhile, Quimbo stated that the hearings have prompted lawmakers to consider reviewing the country's oil deregulation policy, emphasizing the challenges in dictating pricing within a deregulated industry.
