Sorsoganons to oppose oil price increases

Photo coutesy of STOP OPI
Photo coutesy of STOP OPI

The formation of STOP OPI in the province of Sorsogon is a part of the nationwide clamor to address the alarming increases in the prices of oil and other petroleum products and their attendant problems. Specifically, STOP OPI is the Sorsogonanons initiative to engaged the issues involved and to expose and oppose the overpricing made by the oil companies led by the Big 3 (Petron, Shell and Caltex) in the pricing of oil products, the 12% Expanded Value Added Tax (EVAT) which further aggravates the prices f oil products, the collusion between the government and the oil companies and the utter inaction of the government to address the problems in the oil industry and other concomitant problems, and the total bankruptcy of RA 8479 or the Downstream Oil Industry Deregulation Law. All these factors contribute to the unjust, unrestrained and unending spikes in the prices of oil and the other petroleum products.

As a consequence of these oil prices of basic commodities have also spiraled. The prices of rice, fish and other items needed for the daily food requirements of the people have become prohibitive. Millions of Filipinos nowadays passed mealtimes with tuyo and instant noodles only, denying them the proper nutrients for healthy body. Worse, so many have passed the days with one at all. All these amidst widespread poverty due to the chronic crisis of unemployment and underemployment in our society. Efforts by some quarters in the transport sector to raise the fares in public utility vehicles have only caused the prices of basic commodities to soar higher.


In the last few years  of the nineties (90’s), during the Ramos administration, the price of diesel was P7.00 per liter. When President Benigno Aquino III assumed office last year, diesel was P34.25 per liter. Today, August 2011, the price is P43.85 per liter. It’s no wonder, therefore, that Big 3 posted huge volumes of profit in 2010. Petron even bragged of a high 78% profit in the first quarter of 2011.

A cursory view of a roller-coaster increase and roll back in the prices of oil would reveal that the increases far outnumber the rollbacks. Further, the oil companies would only slash a few centavo during rollbacks and would add peso-ranged increases during hikes. Thus the frequency of the increases and the bigger hikes effectively hide the overpricing of oil products. Another way of overpricing was the practice of raising the pump prices of diesel and gasoline as soon as the foreign suppliers announced increase of prices in the world market. Thus, the buffer stocks of the oil companies which were purchased with lower prices would be sold at higher rates. Meanwhile, there’s no automatic lowering of the prices when oil becomes cheap in the world market.

In researches separately undertaken by the transport groups led by PISTON (Pinag-isang Samahan ng mga Tsuper at Opereytor Nationwide, KMU (Kilusang Mayo Uno) and BAYAN (Bagong Alyansang Makabayan), the profiteering or overpricing in oil price, as of today, rages from P8.37 to P9.22 per liter. This means that the amount of money sucked by the greedy oil companies from jeepney drivers per day ranges from P251.10 to P276.60 (30 liters consumption per day x P8.37 or P9.22). Even Senator Ralph Recto averred in 2010 that the prices of diesel and gasoline were overpriced by P8.00 per liter.

12% EVAT

Twelve percent (12%) of the price of oil, which is the EVAT, goes directly to the government. Last year, 2010, the government earned P47 billion from the EVAT on oil. The total collection since the first implementation of EVAT in 2006 up to the present is P234.97 billion. For every liter of diesel or gasoline that motorists purchase, P5.47 and P6.83, respectively, go to the government.

Oil Deregulation Law

The ODL was enacted in 1998. It provided for allowing interested oil companies to do businesses in the Philippines so that, as the law rationalizes. More players in the field would spur stiff competition that would in turn press the price of oil downward. But contrary to the much-touted expectations, the opposite happened. From the P7.0o per liter of diesel in 1998 when the law took effect, the price of diesel rose to P43.85 per liter today.

Government Inaction and Collusion with the Oil Cartel

The administration of President Aquino is not responding to the crisis wrought by the present oil industry in favor of the toiling masses. The Department of Energy (DOE) has merely become the mouthpiece or spokesperson of the oil cartel led by the Big 3. The government cannot act otherwise because Mr. Aquino’s Eduardo “Danding” Cojuangco has substantial investment in the oil industry in the Philippines. Sixty eight percent (68%) of Petron is owned by the San Miguel Corporation which is owned by Danding Cojuangco.

The Aquino government through the DOE is always quick to justify any spike in the prices of diesel, gasoline and other oil products, but it would not justify nor act on the clamor for higher wages among the working people so that they could defray the high cost of living, goods and services due to the incremence in the prices of oil products.

There’s pending bill in the House of Representatives to address the problem of oil industry. House Bill 3455 aims primarily to regulate the petroleum industry and repeal RA 8497 or the Downstream Oil Industry Deregulation Law and provided for the 1) creation of Petroleum Regulatory Council; 2) centralization of oil procurement through a National Petroleum Exchange Corporation; and 3) ordering the government to actively participate in the oil industry through the buy-back of Petron. But, Aquino did not carry this house bill to the Legislative-Executive Development Advisory Council (LEDAC) for action.

The nationalization of the oil industry is the ultimate solution to the oil crisis obtaining in the country. But, not a word had been heard from the present administration with regard to this. Indeed, Mr. Aquino has priorities other that the interest of the Filipino people.

It is therefore incumbent upon us to undertake the necessary steps to address the pressing problem of oil price increases. Let us oppose the oil price increases.

(Editor’s note: This briefing paper was presented during the launching of Sorsoganons To Oppose Oil Price Increases – STOP OPI, August 28, 2011, Sorsogon City)


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