Sunday, April 24, 2005

NR0421:Beltran files bill f or Petron buy-back

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release April 21, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

Rep. Beltran files House Bill 4206 enabling GMA government to buy back Petron

Anakpawis Representative Crispin Beltran today filed a bill buying back Petron, saying that President Gloria Macapagal-Arroyo has no other choice but to support moves for the full nationalization of the oil industry starting with the buy-back of shares from Saudi Aram Co and the repeal of the Oil Deregulation Law. Along with House Bill 1063 which junks oil deregulation, HB 4206 seeks to break the cartel created by the big transnational companies such as Petron, Shell and Caltex.

"It aims to give the government a bigger role in the downstream oil industry and have a greater participation in determining the market forces. Additional to such aims, the bill seeks to address the continuous increase of oil prices by paralyzing the free hands of oil companies in increasing oil prices at their whims and caprices which became very obvious during a public hearing conducted by the House Committee on Energy," he said.

Beltran said that Pres. Arroyo should immediately instruct the Department of Energy (DOE) to reverse the privatization of all government agencies related to energy, deregulation of the power and energy industry and reduction of dependency on oil-fired plants.

Consistent to the oil deregulation law RA 7638, the first privatization effort in the energy sector after the passage of the said law was the selling of the Philippine National Oil Corporation's 40 percent equity in Petron Corporation to Arab-American Oil Corporation (ARAMCO). At that same period of time, the other 20 percent of Petron's equity was sold to the public through an initial public offering making the Philippine government as represented by the PNOC a minority in the country's leading oil company.

Beltran said that since Petron Corporation is one of the three main players in the Philippine downstream oil industry, it is very vital to the national economy."It's one of the country's largest oil refining and marketing company. It captures 35 percent of the local oil market. At present, it is the only oil company in the country that has the full capacity to refine crude oil and produce the different end products that are finally used in the industries and daily human activities. All efforts must be made to recover Petron and place it under a nationalization program."

Historically, Petron was created by the Philippine National Oil Company (PNOC) in 1973, the same year PNOC was created, as a reaction to the oil crisis in the 1960s. Initially, its main function is to become the marketing arm of the PNOC which refines the crude oil.

"The motives behind the establishment and initial running of Petron is backed by the idea that the government should do something to prevent cartelization and monopolization of the downstream oil industry. The birth of Petron was designed to compete with the existing monopolistic control of Shell and Caltex in the oil industry during that time. The government oil company was setup to battle the continuous increase in oil prices brought by the global oil crisis of the mid 20th century," he said.

In the meantime, Beltran said that what remains to be the most decisive step to date to stop the oil companies from jacking their prices at the slightest available excuse is the to junk oil deregulation. "This infamous law has resulted to tremendously destructive increases in oil prices which affect the economic well-being of every Filipino household," he said.

Since 1998, the year of the passage of the Oil Deregulation Law, gasoline and diesel prices increased by more than 130% and 230% respectively. Liquefied petroleum gas (LPG), the commonly used household fuel, also experienced a remarkable increased by at least135%. It is also notable that prior to deregulation, a peso rollback in oil prices frequently occur while after 1998 oil price rollback happens very rarely and if ever there is one, oil prices decrease by not more than 50 centavos.

Ibon Foundation reported that in year 2003, oil corporations have overpriced their products by at least 91 centavos per liter. "It is no wonder why oil companies such as Petron, Shell and Caltex ranked fourth, fifth and seventh in the The Philippines Top 500 Corporation in 2003. The overpricing of their products have resulted to the multi-billion peso superprofits they have acquired from the bed-ridden economic condition of the Filipino families," Beltran concluded.#


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