Press Release
November 27, 2008

Loren urges big 3 oil firms to effect major price rollback

Senator Loren Legarda yesterday urged the top three oil companies operating in the country to follow the example of small player Unioil in slashing the pump prices of gasoline and diesel by about six pesos.

Loren pointed out that since oil players in the country pay the same taxes and have about the same procurement costs of the fuel they sell to end users, she sees no reason why Caltex, Shell and Petron cannot reduce their prices substantially.

The senator noted that at the time when oil was selling at about $145 per barrel in the world market, local pump prices for gasoline hovered around P60 per liter.

"You do the math," Loren said. "World oil prices had hit below $50 a barrel, yet we do not see a commensurate rollback in the local pump prices of gasoline and diesel."

She said that while the oil industry has been deregulated, government should still guard against predatory pricing schemes, if indeed they are being resorted to.

Loren warned that pump-price reductions borne by oil prices hitting the $50/barrel mark should not just be set aside if the prices of crude oil should climb again due to speculations and the slashing of production of the Organization of Petroleum Exporting Countries (OPEC).

Crude oil was trading at around $54/ per barrel (www.oil-price.net) and as high as $66/barrel (www.fogindustries.com) yesterday depending on the index.

Loren appealed to the oil players to practice corporate social responsibility by providing consumers rollbacks that are at par with the reduction in the prices of crude oil.

She said that big rollbacks by the oil firms will enable transport operators to lower fares, thereby giving the majority of Filipinos a reprieve from the high cost of everything else.

"Any major oil rollback will lessen the transportation cost of goods and our working class, thereby stimulating the economy," said Loren. "It will be much appreciated by the people."

But if the major oil companies would not match the P6-rollback effected by Unioil, Loren said consumers have the choice to choose which fuel providers to patronize.

Loren's admonition to the oil players was echoed by transport groups, including the Pinagkaisang Samahan ng Tsuper at Operator Nationwide, which said if one oil company can reduce prices substantially why not the so-called Big Three.

The transport group had just held a strike in the Bicol region, forcing the suspension of classes there.

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