Villar to oil companies: Explain price increase

Nacionalista Party President Sen. Manny Villar today called on major oil players to explain in detail how they arrived at the adjustments that caused the series of price hikes on petroleum products recently.

"There is an uproar whenever oil companies hike their prices because the public has no idea how these companies adjust oil prices. The explanation 'due to price increase in the world market' no longer suffices because there is a suspicion that adjustments do not reflect price movements in the world market accurately," Villar said.

Villar noted that many people were surprised with the increases that took effect last month despite the recorded decrease in prices in the world market.

"Oil companies should be open and aboveboard with regard to their pricing. This is to thwart suspicion that these firms are raking in huge profits in this time when people are suffering from the effects of the global financial crisis," he said.

Villar said price adjustments should be explained in detail in the same way as the cost of electric power has unbundled in electricity bills.

This way, Villar added, the pricing of petroleum products will be more transparent and understandable to the general public, unlike the present practice of imposing price increases without justification.

A detailed explanation in words easily understandable by the people will assure the public that the hike in prices is needed and truly reflective of the price in the world market, he said.

"With a detailed breakdown of the cost of oil, the public would know how much goes to tax and other components of the pricing mechanism," he added.

Villar was also pushing for an audit of oil firms' financial records and for the imposition of proper sanctions in the event irregularity on the pricing of oil products could be found.

"The Department of Energy is well within its power to examine the books of account of oil companies to see whether they are unjustly raising oil prices at the expense of consumers," he said.