Worn out stunt

EDITORIAL

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11/01/2009

The induced confrontation between the government and local oil companies after the imposition of Executive Order (EO) 839, which placed a cap on the prices of oil products, is the result clearly of political grandstanding that smells of a shakedown for campaign funds.

Unfortunately, it would be the public that will again bear the cost of the Gloria heist job in the future.

While Gloria enforced the freeze on oil product prices through the EO, there were no related efforts or measures to assure the public that oil companies will not get back their supposed losses which means a bigger opportunity for them to tag on profits after the lapse of the EO.

What this means is that while the oil companies have no option but to bring down their prices, as mandated by the Oil Deregulation Law and the EO, they will naturally be expected to raise the prices even higher than that of the mandated price, since what is likely to happen is that the oil companies will jack up the prices really high, like say, P4 per liter of gas, plus P1 every week, to make up for the time that they were selling gas at retail prices during the calamity situation.

The true intent of Malacañang was too evident in the EO, in being temporary in nature, until after the state of calamity is lifted over Luzon.

It would have had shown more conviction in the political sideshow had it taken over the operations of the local refineries since it would now have control over the supply of oil products and, at the same time, be able to finally tell the public whether or not petroleum prices are indeed overpriced. To date, there has been no opening of the oil companies’ books.

Many have stepped forward with evidence showing oil companies are allegedly obscenely overpricing. There is consumer advocate Raul Concepcion and former Socio-economic Planning Secretary Ralph Recto, but the government grudgingly acted on this and the evidence was even overshadowed by the word war between Recto and the oil companies’ champion Angelo Reyes, who believes that being Energy secretary is to protect the interest of oil companies.

The actions against oil companies in the past are only demands from Reyes for explanations on price increases and a perfunctory order to hold an audit, not by the Commission on Audit (CoA) but by private auditing firms that are likely one time or another commissioned by one or two of the oil companies, on oil firms’ books.

The EO seems to be a way of telling the oil companies that keeping the status quo would come at a price.

It was also a good vehicle to burnish a tattered image as the nation approaches an election year.

The price cap on oil products was a rehash of the 2002 cap on state firm National Power Corp. (Napocor)’s collections for the reviled power purchase adjustment (PPA) that in turn was the result of lopsided power plant contracts signed during the term of former President Fidel Ramos.

The cap was imposed when Gloria’s popularity rating started to dive after the 2001 power grab from President Joseph Estrada and just before the 2004 polls.

When the cap was lifted until lately, electricity bills skyrocketed because Napocor needed to recover the deferred collections.

Likely, it would be the same case with EO 839. The cap will likely be removed when Gloria gets what she wants from oil companies and the period after that would have oil prices rising like mad.

Oil companies exist in the safest business environment in which they are allowed to recover whatever losses they incur, of course, including that from the Gloria-imposed cap.

Gloria rocked the oil companies’ peacefully profitable routine hoping that some pieces of silver will fall in the process.

EO 839 is another of Gloria’s useless gimmick.

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