Shell,
Petron netted P70B
in 10 years of oil deregulation
GULLAS WARNS OF PRICING ABUSES
CEBU City – The country's two oil refiners
– Pilipinas Shell Petroleum Corp. and Petron Corp. –
have raked in nearly P70 billion in combined net profits since
the passage of the Downstream Oil Industry Deregulation Law
in 1998, according to a senior member of Congress.
Cebu Cong. Eduardo Gullas said Shell posted
P33.59 billion in cumulative net profits from 1998 to the
first quarter 2008. Petron cleared P35.18 billion in profits
over the same period, he said.
Gullas cited the regulatory filings of the
two oil firms as the source of his figures.
"The Downstream Oil Industry Deregulation Law has definitely
been a boon to the two oil refiners and other (industry) players,"
Gullas said.
"There is also no question that as a
result of soaring world oil prices, industry players are enjoying
enormous pricing power that has enabled them to pump up their
profits," Gullas said.
"Consumers are now extremely vulnerable
to potential pricing abuses," he warned.
Since the start of the year, the oil firms have increased
diesel and kerosene prices 20 times, by a total of around
P22 to P24 per liter. They have also raised gasoline prices
19 times, by a total of about P19 per liter.
Gullas stressed the need for the Department
of Energy (DOE) to use its powers under the Downstream Oil
Industry Deregulation Act to thwart possible pricing abuses
by the oil companies.
“The DOE has adequate powers under the
law to rigorously watch pump prices and check potential abuses.
The law did not render the DOE helpless with regard to any
excessive and unreasonable increases in the prices of petroleum
products," Gullas said.
He cited the provisions of the law -- Republic
Act 8479 -- that enable the DOE to check possible price manipulation
and similar abuses:
• Section 14 (d), mandating the DOE, through the DOE-Department
of Justice Task Force, to act upon any unreasonable increases
in the prices of petroleum products;
• Section 15 (b), empowering the Secretary of Energy
to order any person and require the latter to file reports
or respond to specific questions, under oath, on any matter
the Secretary may want regarding the oil industry; and
• Section 15 (g), compelling the DOE to make public
regularly any information it obtains that is in the public
interest.
"The DOE-DOJ Task Force is empowered
to gather information under oath and investigate on its own
any matter about the industry. It may also file certain complaints
before the proper court, if necessary," Gullas said.
Gullas said Malacañang or Congress
may also direct the DOE to investigate and report the facts
relating to any alleged violation of RA 8479 by any person
or corporation.
Shell previously reported a net profit of P3.1 billion from
January to March this year. Petron posted a net profit of
P658 million in the same period.
From 2005 to 2007, Shell's annual net profit
averaged P5.41 billion, while Petron's averaged P6.03 billion.
The third of the so-called Big 3 oil firms,
Caltex Philippines Inc. (now Chevron Phils. Inc.) has since
closed down its 72,000-barrel of oil per day (BOPD) refinery
in San Pascual, Batangas.
Chevron now merely operates a finished petroleum
product import terminal in Batangas with the capacity to store
2.7 million barrels.
The figures with respect to Chevron's financial
performance were not readily available. Chevron is no longer
subject to the same rigorous disclosure and financial reporting
rules that apply to Shell and Petron. Chevron nonetheless
last reported a net profit of P2.75 billion in 2006.
Petron controls 39 percent of the local market
for petroleum products. Shell has a 31 percent market share,
and Chevron, 15 percent. New oil players corner the remaining
15 percent.
Petron runs a 180,000-BODP refinery in Limay,
Bataan. Shell runs a 110,000-BOPD refinery also in Tabangao,
Batangas./PN
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