Ultimatum up for oil firms

THE DISPARITY of fuel prices between Baguio City and La Union province may soon be reduced after Baguio City Representative Marquez Go vowed to amend portions of the present oil deregulation law.

This following the additional effects on petroleum products with the implementation of the Tax Reform for Acceleration and Inclusion or TRAIN law this year.

"We have given them an ultimatum for them to resolve the price disparity or else, we will be filing a law amending the oil deregulation law which will give these oil companies a maximum increase with the end in view that

they will not have the opportunity to make unexplainable increases in the prices like what they are doing at present," the lawmaker said.

Embodied in the Republic Act No. 8479, otherwise known as the “Downstream Oil Industry Deregulation Act of 1998,” is the policy of the state that deregulates the oil industry to foster a truly competitive market which can better achieve the social policy objectives of fair prices and adequate, continuous supply of environmentally-clean and high quality petroleum products.

With deregulation, government allows market competition where it does not interfere with the pricing, exportation, and importation of oil products, even the establishment of retail outlets, storage depots, ocean-receiving facilities, and refineries.

At present, the price disparity between Baguio City and La Union province which is the source of petroleum products for gas is at P10.00 to P14.00 per liter, while diesel has a P4.00 to P5.00 pesos per liter.

"Petroleum producers in our three congressional hearings last year explained the reason for the disparity was due to the cost of transport from the source to Baguio City which is not right since the difference in kilometers between Poro Point to Baguio is 60 kilometers, while Poro Point to Rosario, La Union is at 57 kilometers," Go stressed.

Malacanang spokesperson Harry Roque in his recent press briefing during the opening parade of Panagbenga explained excise tax on petroleum is not based on the price of petroleum products but rather based on a per liter basis.

“It is not due to the implementation of TRAIN since we are now nearing the record high prices in the world market beyond our control. But overall, the benefits of this measure will be for the vegetable farmers of Benguet and the tourists for Baguio City," said Roque.

Roque assured to relay to Energy Secretary Cusi the present disparity in fuel cost between Baguio City and La Union province.

Since a decade ago, lawmakers made a proposition that deregulation would secure the Philippines from the vulnerability of oil price shocks due to its heavily dependent on imported oil.

Lawmakers now accepts the call to scrap the law as six out of ten Filipinos favor the repeal of RA 8479 or the oil deregulation law.