Market forces, not gov’t drive prices of oil products – DOE

By: Cristina Arzadon, PIA 1, Ilocos Sur


BANTAY, Ilocos Sur – Officials of the Department of Energy said oil prices will continue to rise or fall even under a regulated oil industry.

Asst. Diretor Rodela Romero, of the DOE’s Oil Industry Management Bureau, said oil prices are based on market forces contrary to belief that the government can control price movements.

“We cannot stop oil prices from increasing. But the DOE can act upon complaints of unreasonable rise in the prices of petroleum products,” she added.

Romero said Republic Act 8479 or the downstream oil industry deregulation law authorized the DOE through a joint task force with the Department of Justice to act upon cases of unreasonable price adjustments by retailers of oil products.

Romero led the DOE team in a multi-sectoral advocacy on the downstream oil industry here last week to create awareness among the public including owners and retailers of liquefied petroleum gas (LPG) and other liquid petroleum products on the provisions of the deregulation law.

But Romero said no cases could be filed against business owners after each price adjustment in the market because retailers adjust their prices reasonably.

Lawyer Angelito Agoncillo, chief of the DOE’s hearing division, advised the public to monitor whether oil retailers have been imposing unreasonable prices of oil products.

“You can file a complaint before the DOE-DOJ task force but you need to prove it. We need evidence,” he said.

Romero said oil prices will continue to soar even under a regulated industry.

“The law (on deregulated oil industry) has nothing to do with the soaring oil prices. Even without the law, oil prices will balloon because of market forces,” she added.

Romero said the law may not have empowered the government to control oil prices but it provided a competitive market under a regime of fair prices and guaranteed a continuing supply of environmentally-clean and high quality petroleum products.

She said the deregulated downstream oil industry has since been a contentious issue particularly on the pricing and compliance of gas stations and LPG establishments to quality standards.

The DOE later provided an avenue to discuss the downstream oil industry beginning 2011 to engage the public, local governments and the media through an advocacy campaign in partnership with the Philippine Information Agency.

At least 18 campaigns have been mounted in various regions in the country.

Incorporated in the campaign is a demonstration on the proper calibration and sealing of gas dispensing pumps to certify that buyers are given the accurate amount of gasoline.

Under the law, city and municipal treasurers are authorized to inspect gas stations and conduct calibration and sealing of gas pumps.#