DoE to appeal CA ruling on oil price transparency order

THE Department of Energy (DoE) said Thursday that it will appeal a Court of Appeals (CA) ruling which blocked the implementation of its plan to make oil companies reveal the cost structures underlying their retail pricing strategies.

On Sept. 30, the CA upheld a decision by the Taguig Regional Trial Court to issue a writ of preliminary injunction preventing the DoE from enforcing its circular requiring greater disclosure of the cost components of fuel.

“The DoE would like to emphasize that the CA ruled only on the issue of the validity of the trial court’s issuance of a writ of preliminary injunction,” it said in a statement.

It said the court did not rule on the validity or invalidity of its department circular. The DoE has yet to receive a copy of the ruling.

“Once formally received, the DoE intends to seek a reconsideration of the decision, and raise the issue with the Supreme Court, if necessary,” it said.

The revised guidelines for the monitoring of petroleum product prices by the downstream oil industry require oil firms to submit their detailed computations of cost components with corresponding explanations and supporting documents to justify their adjustments to pump prices.

Last year, Pilipinas Shell Petroleum Corp. (PSPC) asked the regional court to block the implementation of the DoE circular.

The CA said: “The cost margins, pricing structure and marketing strategies of PSPC are confidential in nature which, if revealed, can damage the company’s business.”

“To reiterate, there is nothing in the law which requires the disclosure of trade secrets to the DoE and since the loss of trade secrets is unquantifiable, it is considered grave and irreparable injury which warrants the issuance of the injunctive writ,” it added.

According to the DoE, this case stemmed from the “wrong notion that the supposed trade secrets they are being obligated to submit to the DoE will be divulged to the public.”

“Time and again, the DoE has been stressing that all confidential information shall be kept strictly confidential,” it said.

The Energy department maintained that disclosing the pricing components “would foster greater market transparency by establishing the trends in the prices of oil and finished petroleum products.”

“This, in turn, would help ensure a level playing field within the oil industry, while upholding the best interests of consumers,” the department claimed.

The CA ruling comes a month after the Supreme Court in a decision barred a Manila court from ordering a review of the books of accounts of the country’s top three oil firms — Petron Corporation, Pilipinas Shell Petroleum Corp., and Chevron Philippines, Inc. — to seek evidence of alleged collusion. These firms controlled 49.25% of fuel demand in the first half.

Senator Sherwin T. Gatchalian has said he is planning to file a measure that will strengthen the anti-trust safeguards in Republic Act No. 8479, or the Downstream Oil Industry Deregulation Act. —