Recently, the Supreme Court ruled on the petition of oil companies to block the Department of Energy (DOE) from implementing its 2019 directive requiring them to “unbundle” or disclose detailed price adjustments.
The oil companies had claimed that the DOE Circular No. DC2019-05-0008, or the Revised Guidelines for Monitoring Petroleum Product Prices, violated their rights and conflicted with RA 8479, the Downstream Oil Industry Deregulation Act of 1998.
The circular requires oil companies to submit a detailed report, including a breakdown of the computation, explanations, and supporting documents for the unbundled items that make up the oil company’s price.
The petitioners argued that several provisions of the circular were “forms of price control,” imposed “impossible requirements,” were not in support of RA 8479, and affected their right to a “truly competitive market, and their right against disclosure of their trade secrets and/or privileged or confidential information.”
In dismissing the petition, the SC said that it does not question the policy behind the full deregulation of the downstream oil industry (but) it does not mean that the deregulation of the downstream oil industry is left without any kind of supervision at all.
“After all, the law for the deregulation of the downstream oil industry was not created to protect these oil companies; it is, first and foremost, made for the sake and benefit of the public,” the high court stressed.
Under the same DOE circular, liquid fuel retailers, LGP refillers and LPG dealers are required to submit to the DOE the unbundled computation of the price per liter of all liquid fuel, automotive LPG and household LPS for a specified period.
The computation should show the oil company price, hauler’s fee, taxes, fixed cost, variable cost, profit margin, and total liquid fuel retail price or LPG pick-up price.
This particular information should now spur the Kapisanan ng Mamimiling Katandunganon, (KASAMAKA), Inc., to inquire from the concerned office at the DOE regarding the latest submission of the island’s two main fuel retailers and LGP retailers with regards to the unbundled computations of fuel and LPG prices.
The difference between fuel prices in Catanduanes and the Bicol mainland, particularly in Legazpi City, is considerable enough to warrant such an inquiry from registered provincial consumer group.
For example, diesel fuel is sold by both Powerzone Petroleum Products and Silangan Gas Station at P75.19 per liter, or about P20 higher than the average mainland pump price. The same goes for regular and premium gasoline, the fuel used by most private cars, motorcycles and tricycles.
Thus, it has been the sound practice of drivers of cars bound for the mainland to leave local ports with just enough fuel to make the ferry crossing and load the cheaper diesel or gasoline at mainland gas stations.
In the DOE website, there is a page that provides an estimate of what the public pays for a liter of fuel, based on the pump prices in Metro Manila.
The graphic for the Sept. 3-9, 2024 pump price of P54.10 per liter shows that 60% of the cost, or P32.24 goes to the import cost.
Taxes amounting to P11.80 or 22% is the second biggest component while the additive CME (coconut methyl ester) contributes just 3% or P1.43.
The balance of P8.63, or 16%, is the so-called industry take, or the amount comprising the recovery of all the operating costs and profit margin of the oil company.
For gasoline, the breakdown of the common pump price of P61.75 for the same period is markedly different.
Import cost of P27.58 accounts for the biggest slice at 45% while taxes take up 27% at P16.62.
The additive ethanol comes up to P5.76 or just 9%, while the industry take, which is higher than that for diesel, accounts for P11.79 or 19%.
Section 7 of RA 8479 mandates the DOE to monitor the relationship between the oil companies (refiners and importers) and their dealers, haulers and LPG distributors to help ensure the observance of fair and equitable practices, including the prevention of cartels or monopolies.
Based on the DOE reply, an analysis of what the public pays for in terms of fuel cost, taxes, transport and profit margins of the retailer or dealer should indicate whether Catandunganon motorists are paying too high a price for their fuel of choice.
This should not only provide the public with appropriate knowledge on how imported fuel sold on the island is priced but also guide the consumer group or any citizen for that matter on how to appropriately address the issue.