DOE to reveal how oil firms adjust fuel prices

The Department of Energy (DOE) will implement a controversial circular requiring oil companies to “unbundle” or reveal the details of price adjustments on petroleum products, even without a court decision on the petition filed by oil companies to stop the government’s move.

“Ganun na nga po ang mangyayari … According to legal procedure, habang hindi pa pa nagdedesisyon ang korete, itutuloy namin,” Energy Assistant Secretary Roberto Uy told reporters in a press briefing in Pasay City on Tuesday.

On Friday, the Philippine Institute of Petroleum Inc. (PIP) said it filed a “Petition for Declaratory Relief with Application for a Temporary Restraining Order and/or Preliminary Injunction” against DOE’s Department Circular No. DC2019-05-0008 before a Makati Regional Trial Court.

Unbundling fuel prices “contravenes the dynamics of a deregulated oil market,” the oil companies claimed.

The DOE circular mandates oil companies to “unbundle” or provide the DOE with the detailed computation and corresponding explanation and supporting documents on the causes or reasons of the price adjustment.

Oil companies adjust domestic fuel prices on a weekly basis, usually on Tuesday, based on price movements in global markets.

PIP counts as members Chevron Philippines Inc., Isla LPG Corp., Petron Corp., Pilipinas Shell Petroleum Corp., PTT Philippines Corp., and Total Philippines Corp.

The DOE official said the circular will take effect either on July 2 or July 4 if the court fails to decide on PIP’s petition.

While the Energy department welcomes the petition, Uy said the circular aims to unbundle fuel prices so that the consuming public can see that there is no monopoly or oligopoly or abuse in the oil market.

Oil companies were consulted before the circular was drafted, the DOE official noted, saying he was not surprised that the companies started opposing the move since “we belong to a democratic society and everyone is entitled to their own opinion.”

In a separate text message on Tuesday, PIP executive director Teddy Reyes reiterated that a deregulated oil market fosters healthy competition as market competition determines prices in retail outlets.

“With deregulation, there are now over 50 active players offering varied products and services. At present, there are almost 6,000 retail stations nationwide compared with less than 3,000 during the regulation era,” Reyes said. —VDS, GMA News