February 22, 2024

An itemized list of how oil prices are adjusted remains the best way for consumers to understand what they are paying for fuel and other petroleum products, officials of the Department of Energy reiterated.
DOE Usec. Alexander Lopez said the unbundling of fuel prices will help consumers understand how adjustments in oil prices are computed.
The proposed unbundling in fuel prices follows the concept in the power industry, in which all the charges paid by electricity consumers are reflected on their monthly bills, such as generation, transmission, distribution, and taxes.
“If fuel prices are unbundled, at least the consumers would see and understand what they are paying. This way, if prices are high, then they would understand kasi nakikita nila kung ano ang binabayaran nila,” Lopez said.
Lopez and DOE-Luzon Field Office head Renante Sevilla were in Baguio on Jan. 20 for a dialogue with stakeholders of the downstream oil and power sectors.
Sevilla said the consultation was called so the DOE could hear from dealers and other stakeholders the reason for the wide discrepancy in the prices of fuel products in Baguio compared with other areas that are more distant than the city.
Sevilla said that in 2018 following the dialogue with former Mayor Mauricio Domogan and the oil retailers and dealers, oil prices dropped to P3 to P5, but the disparity again returned after some time.
The DOE has been conducting a series of consultations among industry players in Baguio, but Sevilla said after they hold dialogues, prices would go down but will again shoot up at unreasonable rates after some time.
This time, the DOE officials said they want to get to the bottom of the problem so they would come up with a more permanent resolution to the concern.
Local dealers of the so-called “Big Three” oil firms were consistent in saying that their mother companies are the ones dictating the prices and they do not have the liberty to change what was already entered in their point of sale (POS) system.
“As retailers, we are bound by what our mother companies dictate. As much as we want to lower fuel prices, we cannot do so because our POS is controlled by our main companies,” said local retailer Mary Jane Gacad.
Her sentiment was shared by retailers and representatives of the large oil companies who attended the dialogue. They said they impose the prices that appear in their POS system.
Lopez said these are among the issues the DOE wants to address when it moved to require oil firms to unbundle their rates so that consumers could better understand why there is wide disparity in prices.
“We are not blaming the dealers or accusing them of imposing too high prices. We just want to understand the issues surrounding the wide disparity in the prices of fuel in Baguio so that we can also come up with the appropriate solution,” Lopez said.
He added the government could not impose prices of fuel because of the Oil Deregulation Law.
The least that the DOE could do, according to Lopez, is to require oil companies to itemize how their fuel price adjustments are computed so that consumers could better understand what they are paying for.
The Supreme Court has issued last year an injunction against the move of the DOE to compel oil companies to unbundle fuel prices.
Large oil companies filed an injunction against the DOE’s move, raising fears their trade secrets might be compromised.
While the DOE submitted to the SC order, Lopez said the DOE still believes unbundling fuel prices will help consumers understand if fuel prices are fair or reasonable.
He also called on Baguio residents to help the agency address issues about the oil industry by bringing to their attention the concerns that must be addressed.
“We ask the people of Baguio to help us identify issues that must be addressed. Give us the complaint, we will act on it. We cannot do this on our own. We need the public’s help,” he said.
He added they will also look into the observations that fuel prices in tourist destinations, such as Baguio City, are usually higher than their neighboring areas, which are not frequented by visitors.
“We will look into that information because if that is the case, it is the locals or residents who suffer the consequences, not the tourists,” he said. – Jane B. Cadalig