Sunday, March 13, 2005

NR0311: On the weekly OPHs

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release March 11, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

Solon predicts street riots if oil companies jack prices on a weekly basis; urges fellow lawmakers to support bill junking oil deregulation law

Anakpawis Representative Crispin Beltran today slammed Malacanang's proposal that oil companies should raise oil prices only by P0.50/liter a week. "Malacanang might think that this proposal would pacify the public and make consumers accept the reality of weekly oil price hikes, but this proposal is downright preposterous. Instead of haggling for limited oil price hikes, this government should be giving the oil cartel a what for and pushing for a restraining order against all OPHs," he said.

"A weekly oil price increase of P0.50 will be a nightmare for everyone. There's nothing to stop manufacturers and stores from jacking their prices and there's be greater economic chaos. The transport groups are well justified not only in demanding a fare increase, but more importantly, in calling for nationwide transport strike that will paralyze all operations. Malacanang is orchestrating further economic mayhem with its proposal. It's a outrage that it has taken a wheedling tone with the oil cartel instead of standing up against it in defense of consumers and the public," he said.

"Soon enough, there'll be riots in the streets over the oil price hikes. It's inevitable that with OPHs, there'll also be increases in the rates of electricity. The Filipino people can't take much more of these attacks on their economic welfare. People are already clamoring for Pres. Arroyo's head because of the tax measures she's pushing," he said.

The veteran labor leader said that there were no more ifs and buts, "The oil deregulation law should be scrapped immediately. Shell, Caltex and Petron have abused it to the hilt, leaving consumers and the entire economy in the lurch," he said.

Beltran urged fellow representatives to support HB 1065 repealing the oil deregulation law. "Past and present officials of the government have failed miserably to formulate and implement effective policies that provide immediate relief from the oppressive effects of the automatic adjustments in the prices of oil products, free from the hassles of public scrutiny and other transparent processes. The government should not hesitate to institute reforms in order to fully protect the people, even if such an action is contrary to the interest of the powerful and influential transnational oil corporations," he said.

Beltran said that under the oil deregulation law, the following took place to the detriment of the Filipino people and the national economy:

a) The removal of the limits to profiteering which, prior to the deregulation, the rate of return base (RORB) was pegged at 12%
b) An automatic pricing mechanism was instituted. Before, public hearings at the then Energy Regulatory Board (ERB) were required prior to any oil price hike. Under deregulation, the increases have become automatic. The oil companies are no longer obligated or bound by law to explain the increases; neither are they compelled to announce the increases at an earlier date
c) There are no more limits to the amount they can increase in prices, whereas pre-deregulation, the limit was pegged at P0.50 per liter
d) The subsidies for oil products such as kerosene, LPG, and coal which are the materials used to generate electricity and are the main fuel sources utilized by majority of households
e) Removal of tariff differentials. This means that under deregulation, the lower tariffs for oil companies that have refineries in the Philippines were removed supposedly to ensure that Petron, Caltex and Shell will not be able to have an unfair advantage. This is a naïve assumption because the cartel of the three big corporations is already well-established and it cannot be easily dismantled simply through lower tariffs for their competitors.
f) The removal of the Oil Price Stabilization Fund (OPSF). For all its limitations and loopholes, the fund could have still been utilized by the people if its management was more transparent and in keeping with its genuine purpose.

In short, oil deregulation only worsened problems in the oil industry and further victimized consumers and the economy," he concluded.#


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