Baguio City oil traders have highest industry take in NL

By SHERWIN DE VERA
www.nordis.net

BAGUIO CITY — Petroleum business thrives in most cities in Northern Luzon, but those in the City of Pines are profiting the most.

In a dialogue between local retailers, the city government and the energy department on Thursday, June 14 at the El Cielito Inn, official from the Oil Industry Management Bureau (OIMB) of the Department of Energy (DOE) revealed that oil players in the city have the highest increase on industry take.

Atty. Rino Abad, OIMB director presented agency data showing P8.00-P11.00 disparity on gasoline and the P3.00-P5.00 for diesel between the summer capital and some cities North of Metro Manila. Industry take is the part of the pump price that fuel sellers add on top of the cost per barrel, the tariffs and taxes.

Of the existing pump price as of May 2018, industry take of oil players from the sale of gasoline in Baguio amounts to 28% compared to the 18% of San Fernado, La Union and Metro Manila. For diesel, fuel outlets are taking 20% in the City of Pines while those in San Fernando and Metro Manila are only getting 11%.

Supply and demand stable

Besides the case study of Baguio fuel prices, Abad also talked on the factors affecting the price. He said that there is no problem on the supply and fuel demands in the city.

“Price is supposed to be stable, napakalapit sa La Union. We can also assume na pinuputakti ng consumers ang mga stations,” he said.

Based on the bureau’s data, most of the supply of petroleum in Baguio comes from the depot located in Poro Point, San Fernando City. In terms of consumers, a single fuel outlet in Benguet serves about 18,000 individuals and 10,000 in La Union.

Abad expressed his puzzlement as to why there is a steep increase of price in Baguio noting that “if you put up a retail station, tiya na hindi ka malulugi.”
Speak the truth

The director questioned local retailers on the reasons for the price disparity between Baguio City and some cities in Northern Luzon and Metro Manila.

“Who decides on the price, is that a dictated price or you decided that? If you get it from Poro, sino ang nagdidikta sa inyo”

Local retailers from Caltex, Petron and Shell gave the same answers. They said that oil companies are responsible for setting retail prices of fuels.

Abad tried to solicit a more substantial answer from the retailers but failed.

“By implication of the statements made by the oil companies during the inquiry, from Bataan to destination in Poro, La union is they give suggested retail price but La Union to Baguio, kayo na (retailers) ang nagdedecide ng price. Unless you want to voice out kung ano ang totoo, we are inclined to believe them,” said Abad.

Taking advantage?

“We do not want the retailers to loss but we do not also want them to take advantage of our possible ignorance. Komo ang oil industry ay deregulated ay hindi naman tama na sobra-sobra ang inyong ipapatong,” said Mayor Mauricio Domogan, who attended the dialogue.

Since last year, City officials, including Representative Mark Go have raised their concern over the P8.00-P10.00 difference in fuel prices in Baguio and La Union.

After learning of the P0.188 per liter freight cost from La Union to Baguio, and the the mayor was not able to hold back his dismay to the retailers over the overly high prices of fuel in his city.

“Sobra met a ganansia daydiayen ah,” Domogan blurted.

But Abad said that it is difficult under the governing law of the industry to accused companies or retailer of overpricing because the law failed to define reasonable price.

“All we can do is to look for the best approximate, a competitive area, we use Metro Manila, kumbaga tamang presyo is Metro Manila,” he explained.

Roll back

Retailers said that they already adjusted their prices. Diesel and gasoline prices were reduced to about P2.00 and P5.00 respectively. The price rollback happened on June 7 with Shell taking the lead followed by Caltex and Petron over the weekend. This is on top of the P0.60 reduction for diesel and P0.55 for gasoline on Tuesday, June 12.

Go released a statement welcoming the action of the oil retailers. He said the price reduction is “the fruits of our efforts.”

He explained that aside from the hearings held in Congress, separate meetings were done outside with some of the officers of the major oil companies. Discussed in the talks were the commitments of the players to deliver substantial oil price decrease in Baguio City.

“We will never cease to negotiate to these oil companies until such time that we attain a fair and competitive oil prices with that of Rosario, La Union,” the solon added.

While Domogan recognized the roll back, he reminded the retailers that they are still charging P3.00 higher for diesel and gasoline compared to La union and Metro Manila. # nordis.net

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