Editorial:

Oil cartel

MANY Filipinos, particularly drivers and motor vehicle owners, feel helpless every time the country’s oil companies raise the prices of gasoline and other petroleum products, including liquefied petroleum gas.
   
Furious and frustrated, they want to know from the authorities if the price adjustments are justified or not, but the problem is the existence of a law which allows the oil firms to adjust their prices even without the approval of the government.
   
The controversial legislation, Republic Act 8479 or the oil deregulation law, stripped the state of its power to control the prices of imported crude oil and finished products.
   
But more than 10 years after the full deregulation of the industry, the people, particularly the consumers, are wondering whether the government has achieved its goal of breaking the “wings” of the oil giants.
   
Today, even Senate President Manuel Villar Jr. claimed that the simultaneous adjustments of oil prices indicate the existence of oil cartel which violates the oil deregulation law.
   
“Based on what the oil companies are doing, I have serious suspicions that a cartel is in operation. This is a clear violation of the law. Oil price hikes are simultaneously implemented in spite of the strengthening of our currency against the dollar,” he said.
   
Villar filed Resolution 216, urging the Senate committee on energy to look into the apparent lax implementation of safeguards in the oil deregulation law and the reported oil industry cartel.
   
In filing the resolution, the Senate chief underscored the urgent need to determine the usefulness of the hated legislation in preventing an oil cartel amid the unrestrained rise in oil prices.
   
It is not enough that we expose the existence of the oil cartel. After all, the authors of the law wanted to knock down the oil giants to spur competition in the industry.
   
In fact, the law penalizes cartelization and predatory pricing with three to seven years imprisonment and a fine ranging from P1 million to P2 million.
   
And since competition was not achieved, there’s now a need to amend it to prevent manipulation of prices by members of the oil cartel.
   
Or scrap it altogether.

Reaction:

I strongly agree to this editorial. Unfortunately, the author did not publish his name so I don’t specifically know who does deserve credits for this. Anyway, this editorial really helped awaken its readers of the vast unjustified reasons behind the unceasing increase of oil price despite the continuing strength of our peso against dollars. As we could remember, the most used reason to justify price increase over products such as oil and other basic commodities is the prevailing strength of dollars against peso. Well, but it seems it doesn’t apply anymore at this moment because Pres. GMA is really proud that peso is going strong as days pass by. But why nothing seems to be good with the going strong peso? Still, oil prices increases as much as the giant companies can. It feels so bad that even our government can’t stop this crisis. How much more to the poor people who can only afford to accept the reality that even how high the price is they have no choice but consume it?  This oil cartel thing caused this strong manipulation of prices among members. A prevailing truth of violation on Republic Act 8479 or the oil deregulation law. Can’t those people who are in position right now defend the poor Filipinos from all these injustice and prejudices? We have a law but are not strictly implemented. We can’t rely on law alone; it has to be back up with good arms.