Drastic measures are urgently needed to minimize the vulnerability of the Philippines to high global oil prices. Independent think-tank IBON Foundation says this includes the immediate suspension and eventual repeal of the Oil Deregulation Law and setting up a mechanism for government control of to ensure reasonable pump prices.
At present, the only measure that the Arroyo regime is implementing to cushion the impact of increasing global oil prices is the automatic tariff mechanism. But this measure only delays oil price hikes and does not ensure fair price adjustments.
As noted recently by the United Nations, the Philippines is among the countries that are most vulnerable to oil price shocks because it is heavily dependent on imported oil. Worse, more than 90% of the local oil industry remains in the monopoly control of giant transnational corporations (TNCs) through their local units Petron, Shell, Caltex, and Total.
The monopoly of these companies has been further strengthened by the Oil Deregulation Law where automatic oil price hikes are allowed. Consequently, oil companies took advantage of the policy, hiking pump prices of all petroleum products by around 535% since the Oil Deregulation Law was first implemented in April 1996.
The Oil Deregulation Law also provided the big oil companies more space to manipulate pump prices. IBON estimates show that since 2000, pump prices are overpriced by as much as P4.55 per liter as oil price hikes were left unregulated.
Unfortunately, the Department of Energy (DOE) could only talk about its “long-term plans” anchored on questionable programs such as biofuels, aside from its tariff adjustment mechanism, when drastic measures are needed by the people urgently.
IBON reiterates its call for Congress to suspend and repeal the . Only state regulation and control can assure the country’s right now amidst a highly speculative and volatile global oil market.