MANILA — Militant legislators in the House of Representatives are pushing for a full-blown investigation into “the oil companies’ alleged engagement in overpricing, profiteering, transfer pricing and other forms of cartel operations in the Philippines.”
House Deputy Minority Leader and Bayan Muna Rep. Satur Ocampo, in filing House Resolution 677, said that “the House Committee on Trade and Industry has the mandate and golden opportunity to help the suffering people by conducting an investigation on Pilipinas Shell, Chevron Philippines (formerly Caltex), and Petron who have increased pump prices 22 times this year.”
“For the June 2007 to June 2008 period, average pump prices of unleaded gasoline and diesel have increased by 47% and 52%, respectively. This has jacked up prices of food, rice and public transport fares that are heightening the sufferings of the people,” he added.
Royal Dutch Shell, the mother company of Pilipinas Shell Petroleum Corp., posted a net profit of $27.6 billion in 2007, making it the second most profitable company in the world next to oil giant Exxon Mobil. That year, Pilipinas Shell posted profits worth P4.12 billion. Chevron Corp., mother unit of Chevron Philippines, posted a net profit of $18.7 billion in 2007, 9% higher than a year earlier, making it the eighth most profitable company in the world. Its local unit posted P2.75 billion in profits. Petron’s former partner, Saudi Aramco, posted profits of around $15 million in 2007. Petron earlier posted a 31% dip in net income to P658 million in the first quarter.
“Domestic profits do not fully reflect the oil monopolies’ overall profits because the transnational oil firms’ local subsidiaries are merely booking their profits abroad through the deceitful practice of transfer pricing to deflect criticisms of their massive windfall profits,” Ocampo said.
The independent think tank IBON Foundation has disputed the three top oil firms’ claim of under-recoveries as their mother companies, the group said, “continue to gain billions of profits and that local pump prices of petroleum products are overpriced by P12 per liter.”
The research group estimates that as much as 47% to 54% of the pump price of petroleum products represents windfall profits of the oil firms.
“Since Republic Act 8479 or the Oil Deregulation Law was enacted a decade ago, the country has experienced unabated increases in oil prices, contrary to the law’s supposed intent to lower oil prices and break-up the local oil cartel. Since the start of oil deregulation in 1996, pump prices of unleaded gas have increased by 492 percent and prices of diesel have increased by 607 percent with oil firms acting in unison as a cartel. The latest incident of a three-peso increase in the price of diesel immediately followed by a P1.50 rollback upon the President’s appeal reveals the arbitrary and whimsical manner by which oil prices are being set in the country,” Ocampo said.
The militant solon also said that “despite moves to investigate and resolve the matter, the Executive branch, particularly the Departments of Energy and Justice, has miserably failed to provide government and the public a reasonable and well-informed explanation of the oil price movements in the country. The House should thus make its move to immediately address this issue.”
Aside from Rep. Ocampo, HR 677 has Bayan Muna Rep. Teddy Casiño, Anakpawis Rep. Rafael Mariano, and Gabriela Womens Party Reps. Luzviminda Ilagan and Liza Maza as co-authors. # Vincent Michael L. Borneo