Oil firms told to explain lower price rollbacks
The country’s oil companies had been served with “show cause orders” so they can formally explain to the Department of Energy (DOE) the lower-than-expected rollbacks that they enforced at the pumps this week.
The call for explanation from the industry players had been part of the report that the energy department had lodged with the Office of the President (OP) –as the highest government office of the land has also been seeking for explanations on the recent turn of events in the oil sector.
According to the DOE, the estimated rollbacks should have been heftier compared to the R1.45 per liter implemented by the oil companies for gasoline products; R0.60 per liter for diesel; and R1.00 per liter for kerosene products.
The department stipulated there had been “apparent difference in the oil price rollback calculations between the DOE and the oil firms,” hence, the agency issued the show-cause orders (SCOs) to the companies that had adjusted their prices starting on Tuesday (October 1).
Energy Assistant Secretary Leonido J. Pulido III apprised Malacanang that the department’s actions “support our mandate to protect consumer welfare and ensure fair oil industry practices.”
He thus expounded that “the showcause orders would provide these companies the opportunity to explain how they arrived at their respective oil price rollback calculations.”
Pulido qualified the oil firm-recipients of the SCOs, would have until Monday, October 7, to formally respond to the department’s directive. The DoE has not revealed figures as to its expectation of the price rollbacks, but there had been initial calculations that the price cuts for gasoline should have been at R1.60 per liter; and R0.75 per liter for diesel.
This, despite stating that the department “will continue to assure the public that the DOE will not waver in upholding the welfare of consumers, and will keep everyone properly informed of developments on this matter.”
When the drone strike on the Saudi Aramco facilities happened mid-month of September, the DOE had been at the receiving end of criticisms for not being forthright enough as to what repercussions the public should be expecting from the incident.
A week after that, prices at the domestic pumps soared by R2.35 per liter for gasoline; R1.80 per liter for diesel; and R1.75 per liter for kerosene – and that instigated public agitation, prompting even the transport sector to hold their nationwide strike last Monday, September 30.
The Saudi geopolitical incident also prodded the Senate Committee on Energy to drag the DOE and the oil industry players into a legislative investigation as to the facets of their short- to medium and long-term contingency plans in case of sudden surge in world oil prices and any unwarranted disruption of oil supply in the global market.
The DoE just apprised the Senate later on that it targets to reactivate the Oil Contingency Task Force (OCTF) – and that will serve as the body to draw up plans and strategies in case of industry distress and uncertainties.