The continuing and unabated oil price hikes have definitely breached the psychological level of the Filipino people. Generally, all the people and the business sector have been complaining of weekly price spikes, many of which are just announced overnight. It is very sad to note that while people are infuriated of these uncontrolled price hikes, the GMA government remained unperturbed and adamant in intervening of this hapless situation. On the other hand, oil companies continue to rake super profits while the people suffer from the effects of high prices of oil. Record shows that between 2006 and 2007, Petron earned P6.02 Billion and P6.4 Billion respectively while Shell Philippines earned P 4.12 Billion last 2006 and P6.36 Billion in 2007. Adding to the people’s heavy burden of high oil prices, is the 12% R-VAT collected over and above the prices of the oil products. Last 2006, of the total oil sales of P446.59 Billion of the three big oil
companies Petron(P212. 82Billion) , Shell(P157 Billion), a total of P 53.5908 Billion in taxes went to the government.
Even though the oil price hikes is a global phenomenon, there is a particular distinction of the oil price hike situation in the Philippines. And at the center of this is the government’s R.A. 8479 or the DOWNSTREAM OIL INDUSTRY DEREGULATION LAW which replaced the state regulation set-up of the oil industry. While the government has promised the people that the shift from a regulated oil industry to a deregulated set-up will bring about lower prices of oil due to competition, it never came to fore. Even before the outbreak of continuing oil price hikes, the public has never been shielded by predatory pricing happening in the deregulated oil industry. A problem that has been persisting even when the oil industry is still regulated. It is very clear and obvious now that government has rid itself of the burden of governance. It abandoned its state and sovereign functions that will prohibit the continuing existence of the cartel nature of oil
industry so that perfect competition will happen. It defaulted from its mission of protecting the consuming public from the oil companies’ greed by allowing the retention of the current profit margins oil companies through the automatic pricing mechanisms.
Urgent measures to address this problem are very much long overdue and wanting. We, in the labor and transport sector under the ACT NOW will stage series of campaigns to start today June 12, to hold accountable this GMA Regime of the subsequent series of economic mess that plunges our nation to poverty and hunger. Likewise we also compel this government to decisively address and resolve the problem of continuing oil price hikes by implement immediately the following measures:
1) Repeal the Downstream Oil Deregulation Law or the RA 8479 of 1998 and immediately institute price control and price ceilings based on the enforceable automatic pricing formula that recognizes market realities but protects the public from unjust and predatory pricing. Implement a moratorium of price increases of oil products while price control and ceilings are still to be studied and determined.
2) Immediately scrap the 12% RVAT levied on oil products. We still strongly maintained that RVAT is still out rightly regressive. It is but very much reasonable that during this period of economic crisis, the implementation of 12% RVAT should be put to a stop.
3) Level the playing field by dismantling the cartel nature of the oil industry. Liberalizing entry of other oil companies is not an assurance for real and perfect competition to happen.
4) Set – up an independent, accountable and transparent energy regulatory body which will be tasked of pricing and supply determination.
5) Develop a comprehensive program for promoting the optimal use of energy and the development of alternative, renewable and sustainable energy resources.
June 12, 2008
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