Press Statement

April 15, 2012

The recent oil price rollback implemented by the oil firms is definitely not enough and is way below the increases that have been implemented since the start of the year.

Oil prices remain bloated because of monopoly pricing schemes and intense price speculation in the global market. These practices artificially raise prices way beyond the actual production costs. Because the oil industry is deregulated, any price movement in the global market is reflected automatically and immediately in domestic pump prices. Even if oil firms buy their inventories at much lower prices given their long-term supply contracts, the same oil firms are allowed to automatically reflect any price movement in the spot market. This accounts for a form of domestic overpricing that preys on consumers and results in super-profits for oil firms.

It does not help the cause of consumers that oil firms have not been transparent about their pricing methods. The oil deregulation law does not require oil firms to disclose their pricing system and all increases are considered justified.

So long as the industry is deregulated and dominated by monpolies, we will always be at the mercy of profiteering oil firms. The rollback is defeinitely not enough and the people are continuouly victimized by the local cartel and their multinational mother companies. The Aquino government continues to play deaf, blind and dumb towards high oil prices. It merely waits for the next price adjustment to take place. It has not lifted a finger on the issue of the VAT on oil even if prices have reached near-historic highs.

We doubt that the DOE initiated “independent review” of oil pricing will really attempt to unveil the unscrupulous pricing systems  of the big oil firms. The review will only rely on documents voluntarily given by oil companies. It does not have the subpoena power to compel oil firms to disclose their existing supply contracts and other information such as inventories. It really remains to be seen how far this review will really go in exposing the monopolistic and exploitative practices of the oil cartel.