A major gasoline distributor in the province vowed in a meeting with the City Government Friday, February 7, to reduce by P2.00 per liter the pump prices for diesel and unleaded fuel starting next week citing that the other two major oil companies in Palawan—-Shell and Petron—-agreed to implement the same amount of rollback.
Atty. Patrick Tan, the executive vice president for operations, sales, and marketing of William Tan Enterprises (WTE) Caltex (Chevron Philippines), said Friday this is after the public clamor and consecutive discussions with the local government authorities that they decided to write a letter to their head office asking for approval on the rollback.
While the other two major oil companies’ gasoline station retailers were able to come at the meeting with the City Government on Friday, Petron Corporation and Pilipinas Shell Petroleum Corporation have no representatives from their head offices nor from their distributor/operator level in Palawan to speak in their behalf.
“Kasi ‘yong big three (Petron, Shell, Caltex) hindi sila nag-uusap. Actually kami lang dito sa baba ang nag-uusap. So pinaparating namin ang mga reklamo sa head office. Si Caltex naman on our part pumayag naman silang ibaba ng two pesos basta daw makita rin nila na magiging mas active ‘yong government natin sa pag-implement ng mga batas natin sa paghu-hulihan ng mga ilegal na nagbebenta ng gasolina,” said Tan.
“Ang good news lang po, pero alam kong kulang pa rin, nagkasundo naman ‘yong tatlo na ibababa nila ng two pesos per liter starting next week ‘yong presyo province-wide except Taytay. [Ang other two ay] ‘yong Shell pati Petron,” he added.
In a further interview with Tan, he said they also expect the City Government to do their part well in implementing laws that protect every player in the economy towards achieving a “win-win scenario”.
He added they are hoping for further decrease in the price of fuel soon following this initial “goodwill response” of the companies toward the request of the local government authorities.
Tan also reiterated that fuel prices in the province are solely controlled by the head offices. He said neither the retailers nor they at the distribution level can manipulate prices, but upon situations like this can only suggest and wait for approval.
However, Rod Saucelo, the executive assistant and flagship project manager of the City Government said during the same meeting that the fuel industries head offices’ response to the earlier letter of Mayor Lucilo Bayron were contrary to the statement of Tan.
Saucelo reiterated that the Department of Energy (DOE) even affirmed the reason of the oil companies under their letter response, which stated that aside from the deregulated status of the industry, “distributors and market forces” actually dictate the prices.
“Sumagot ‘yong dalawa, ang Shell ang Chevron, ang Caltex, iisa halos ang kanilang reply, ine-explain nila na de-regulated ‘yong industry. Pagkatapos ay sinabi nila contrary doon sa sinabi ni Mr. Tan na ang nagdi-dikta daw ng presyo [ay] market forces at saka ‘yong mga distributors. By the way sumulat din si mayor doon sa DOE at ni-confirm halos ng DOE ‘yong sinabi noong big three,” he said.
In his defense, Tan addressing Mayor Lucilo Bayron in his talk during the meeting, said he was also able to read the response letter of Petron, which he tagged as “hiding behind” the deregulation law.
However, without directly answering the claim of Saucelo that his statement is contrary to the content of the written response of the head offices, Tan commended DOE’s current efforts toward the amendment of this deregulation law.
“Actually ‘yong sinasabi nga ni Sir Rod kanina, nabasa ko din ang letter ni Petron na parang hugas-kamay, nagatatgo sila sa likod ng oil deregulation law. Actually para sa amin na frontliner kami dito, kami ‘yong humaharap ng mga lahat ng mga reklamo, lahat ng sinasabi ng mga tao. Actually may magandang move ‘yong DOE ngayon, gusto na nilang baguhin o ipa-ammend ‘yong oil deregulation law, kasi nga parang nasobrahan daw sa deregulation, which is I think medyo magandang hakbang din from the DOE,” he said.
Comparing average fuel prices in Manila and Puerto Princesa
Engr. Jovenee Sagun, City Planning and Development Office chief, during the meeting presented the figures they have gathered on the pump prices for fuel in the city and in the mainland Palawan.
Sagun said their data as of January 31 this year reveal the high prices of Caltex, Petron, and Shell in Puerto Princesa and in the province, compared to the prices in Metro Manila.
In their data for the prices of “diesel fuel”, Sagun noted an P8.95 price variance in Caltex’s average P50.83 price in Puerto Princesa compared to its P41.88 average price in Manila; P9.23 price difference in Petron’s P50.43 average price in Puerto Princesa against its P41.20 Metro Manila average price; while Shell has a price variance of P10.61 in its P52.4 Puerto Princesa average price compared to its P41.79 average price in Manila.
On the other hand for the prices of “regular gasoline”, Sagun noted an P11.44 price variance in Caltex’s average P61.77 price in Puerto Princesa compared to its P50.33 average price in Manila; P12.18 price variance in Petron’s P61.85 average price in Puerto Princesa against its 49.67 average price in Metro Manila; while Shell has a price difference of P11.76 in its Puerto Princesa P61.92 average price compared to its 50.16 average price in Manila.
Illegal practices and role of the local government
Tan said that it came to their knowledge that there are lots of practices on illegal selling of fuel happening not only in the city, but in the whole province as well.
However, he refused to identify persons or name specific groups during the meeting when asked by City Administrator Atty. Arnel Pedrosa.
He said it is hard for the fuel industry to compete with those who practice illegal trade and reiterated only they who legitimately operate can ensure the “integrity of the quality and volume of the fuel along with the set appropriate price” for the consumers.
“Ine-expect natin sa local government, sa city government, na i-remind ‘yong mga enforcers natin like ‘yong mga fire department, city licensing, na bawal na bawal [ang naka-bote-boteng fuel selling], kasi kung nagkaroon ng sunog sa mga improper like sa stores na nagbo-bote-bote, kapag nagkaroon ng sunog delikado, maraming maaapektuhan. Sana manalo ‘yong [situation na] win for everyone,” said Tan.
Price War: Illegal sale of fuel and its effect on prices
While Tan said he has no concrete basis, his personal theory is that the head office of an oil industry decides the trend of the prices according to how they deem beneficial a decision will be to them in order to keep their business afloat.
Tan said while they cannot determine the very cause of a “price war”, one of the obvious factors is the illegal sale of fuel by illegitimate traders in a specific area, which then compels the legitimate ones to also lower their fuel cost to survive the market.
“Kasi hindi natin ma-determine kung bakit ba nagkaka-price war, kung sinasabi nila bigla daw may smuggler na walang maka-control kaya parating nang parating ang fuel sa Mindano, hindi rin ma-control ng government, kaya ang ginagawa ng big three, mina-match nila ‘yong presyo nila sa ibang trader doon [at] binabawi naman nila sa iba. Actually unfair sabihin na binabawi nila sa ibang lugar kasi ‘bakit dito sa amin babawian mo kami’. Pero bumabalik po ‘yan sa computation nila, averaging weighted average and mark-up nila. Kapag nakita nilang loss sila dito, tumatapal sila dito, yong ibang area ang impression ko itataas nila,” he said.
However, Tan admitted they are “lost” in the complex computation of the oil companies and said their mark-up as an operator remains “almost only the same” regardless of the increase in prices imposed by the head office.
Mayor Lucilo Bayron on the other hand said it is unfair for Puerto Princesa and Palawan as a whole to have high fuel costs and become the oil industries’ solution to their dilemma on their businesses located in the other parts of the country.
“Pini-pick up ko lang doon sa mga sinasabi mo Atty. [Tan]: bagsak ‘yong presyo sa Mindanao dahil sa price war. Nagkaka-price war dahil sa illegal gas supplier. Ngayon, pinapakiusapan kami na i-stop natin ‘yong illegal gas supplier, parang baliktad, dapat i-encourage natin para mag-price war, para bumagsak ‘yong presyo. Sinusundan ko lang ‘yong sinasabi mo,” said Bayron.
“May price war doon so bagsak doon, sina-subsidized dahil doon malupit ang benta. Ngayon ang lugi binabawi, saan binabawi? Sa Palawan at Puerto Princesa. kawawa naman kami, hindi ko matanggap talaga ‘yon. Unfair ‘yon, palagay ko kung ganiyan ‘yong sitwasyon ay mag-a-alboroto talaga ako. Hindi ako papayag ng ganoon. Ngayong medyo nakaklaro ko naiinis ako. Naiinis ako na isa-subsidize natin ‘yong ibang lugar dahil sa may price war doon dahil hindi ma-suheto ang ‘yong mga illegal doon,” added Bayron.
Bayron reiterated that on his own perspective, only the transportation cost must be the difference in the fuel prices sold in the city compared to the area from where it was bought.
He also stated earlier in the meeting the City Government is just representing the population of Puerto Princesa clamoring on the decrease of very high fuel prices in the locality compared to other areas in the Philippines.
City Government’s aim for the meeting
City Councilor Elgin Damasco, chair of the City Council Committee on Energy, said at the start of the meeting this discussion is aimed at ensuring the welfare of the citizens under its jurisdiction.
Damasco said while he understands that the oil deregulation law in the country gives the fuel industry freedom to set prices, the City Government is pleading in behalf of its people for the reduction of fuel prices.
“Tayo ay nagpupulong po ngayon para kami po ay makikiusap sa ngalan ng City Government, sa ngalan ni Mayor Bayron at sa ngalan ng mga mamamayan ng Puerto Princesa, kami ay nakikiusap n asana ay babaan ninyo kahit papaano ‘yong presyo nang maibsan naman ‘yong burden ng ating mga motorist,” said Damasco.
“Alam ko may problema din kayo sa mga smugglers, nababasa natin sa mga news, pag-uusapan natin [dahil] nandito naman si Mayor Bayron, puwde naman nating pag-usapan kung papaano makatulong ang City Government na mahinto ‘yan,” he added.
Damasco also presented the data the City Government has acquired from DOE, mentioning figures that reveal how fuel industries are earning considerable profit.
He also said the City Government cannot impose or make it compulsory for the fuel industries to lower their prices, yet reiterated no one can also stop the City Government from taking necessary action for the general welfare of its people.
“Baka makaisip din kami ng paraan na makikinabang ‘yong mga motorista dahil sa sobrang mahal ngayon, pero baka kayo naman ang mawalan. Ito pakiusap na sana ay mababaan kahit paano ‘yong presyo dahil kung babasehan natin ‘yong report ng Department of Energy ay napakalaki naman ‘yong kinikita ng mga gasolinahan dito sa lungsod ng Puerto Princesa,” he said.