Macroeconomic Policy News

Govt starts probe of oil-price ‘collusion’

A THREE-AGENCY task force has started looking into the pricing scheme of oil companies to determine if there is truth to suspicions they work as a cartel to control the prices of oil in the country.

Transportation Secretary Mar Roxas revealed this on Monday, saying his agency, as well as energy and justice departments were now taking steps to address the issues raised by striking public-utility vehicle operators and drivers on rising oil prices and high toll.

The task force will investigate how oil companies come up with market oil price, particularly how much they actually spend to import the product from oil cartels in the Middle East, transfer it via Singapore or other routes, and load the products into gasoline trucks before they reach gas stations.

Roxas said the task force, aims to find out if there, indeed, is a “questionable collaboration” among oil companies in setting the prices for their products at the expense of the public and transport sector.

“We hear out the public and transport groups’ sentiment on the continuous oil-price hike, thus, the government has quickly taken concrete action to check if there is any collusion among oil firms to control oil prices in the market,” Roxas said.

“We respect the transport group’s rights to strike and air their views. We only want to ensure that the strikes are peaceful and will create minimal effects on the daily lives of our citizens and the local trade,” Roxas said.

The militant Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide went on strike on Monday. But other transport groups, including Pasang Masda, Federation of Jeepney Operators and Drivers Association of the Philippines, and the Alliance of Concerned Transport Organizations did not join the strike; their leaders earlier had a dialogue with President Aquino. In some parts of the country, students and civic groups supported the transport strike and its aims, saying the rising prices of oil also have their effects on the prices of prime commodities.

The energy department was assigned to review the pricing scheme of the oil companies to find out if they had been overpricing their products and to determine the “just and reasonable” prices of oil commodities.

But officials who refused to be named said there was not much the government could do about the toll rates.

Last week the Toll Regulatory Board announced the adjustment of toll rates effective next month due to the imposition of the 12-percent value-added tax on tolls.

“The toll adjustment has been reviewed and approved by the Supreme Court, hence this is legal and the government has to implement it,” Roxas said in a statement.
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By: Lenie Lectura
Source: Business Mirror, Sept. 19, 2011
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