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Rogue traders

A few weeks ago, people in the metropolis were scrounging around for liquefied petroleum gas (LPG). The fuel, used widely for cooking and for running vehicles suddenly seemed in short supply. LPG-powered taxis were grounded and many households went without cooking gas for days.

Today, we know more about the large set of factors that caused supply to thin. Some of these factors are simply too large for us to even influence. Others are within the ambit of our management. Still others are due to plain nefariousness.

Over the last few years, our demand for LPG rose steeply as we found new uses for what used to be cheap gas. Where we once used it as a cheaper substitute for electricity in cooking, more and more vehicles shifted to the gas as gasoline prices spiraled.

When crude oil prices spiked last year, a record number of vehicles shifted to LPG. Conversion kits for motor engines flew off the shelves. New LPG stations mushroomed across the city.

When Meralco raised electricity rates, more households shifted to LPG use as well. Total Corporation reports that consumer demand for LPG cylinders jumped 21%. Auto LPG and bulk accounts grew sharply by 25% last November and December as the holiday season drew near.

At the same time, global developments affected our ability to import the gas.

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The spat between Russia and Ukraine over natural gas left much of Europe in the cold, literally, through the bleakest weeks this winter. That dispute raised demand and prices for LPG worldwide.

The unusually harsh winter affected supplies in other ways. Tankers often had to wait out bad weather in the safety of ports. Add to that the sharp increase in piracy in some of the most critical oil shipping routes off Somalia.

As a result of these passing factors, bulk deliveries of LPG were not only delayed. Prices for the product also climbed. It might not seem like it, considering the usual shabbiness by which the product comes to our homes, but LPG like other oil products are imported from faraway sources.

The last factor — nefarious business practices — has kept the Department of Energy (DOE) preoccupied of late.

LPG dealers here are notorious for short-changing their customers as well as for lax safety procedures in their handling of what is, well, an explosive product. When supply thins, some of the more unethical of these dealers hoard the commodity as they speculate on higher pricing.

Hoarding LPG not only harms consumers. Keeping large stocks of this volatile product in unsafe storage poses great danger to our communities.

In policing the wholesalers and refilling facilities, the DOE obviously needs the full support of the local governments. That support sometimes vacillates. For this reason, Energy Secretary Angelo Reyes has spent much more of his time lobbying local government executives.

Last month, Reyes had to lobby the government of Quezon City for help regarding the operations of the Pinnacle LPG refilling plant for unfair trade and safety violations. The plant, owned by one Arnel Ty, has been found to be shortchanging its customers and faces P806,000 in fines.

As things happen in this country, the plant was able to secure judicial relief against the DOE, delaying implementation of the agency’s safety policies. Each day of delay means the community around the plant remains exposed to the dangers of unsafe storage of the volatile product.

Pinnacle is not the only LPG business of Arnel Ty. He also owns: the Regasco Auto LPG dispensing station in Dagat-dagatan, Malabon; the Omni Gas dispensing station in Pasig; and the Extraordinaire Gas Corporation. Nearly all of these LPG businesses have been found violating regulations and faces a number of penalties.

Last June, a DOE task force working with the Malabon city government managed to shut down the Malabon Regasco outlet for operating without DOE authorization and for failure to pay fines imposed on it. The Pasig City government likewise shut down Omni Gas in that city for trading illegally and unsafely.

Extraordinaire was raided by a DOE task force almost a year ago. The outlet was cited for a large number of violations: 46 counts of under-filling; 66 counts of illegal trading or refilling without authority; and 64 counts of filling LPG cylinders without seals.

The same Arnel Ty who owns all these penalty-ridden LPG companies had been going around the media outlets, making pronouncements about the supply of the fuel. The rest of the LPG industry, however, faults him for rouge trading and the disrepute he has brought to the business.

Instead of submitting to the safety and consumer-protection regulations, this trader has chosen to defy them. He has found every means to undercut or delay the implementation of safety regulations and the penalties for the many instances he had breached these regulations.

Why the profit of one reckless enterprise is allowed to take precedence over the safety of the community in this city I love to live in is a cause for wonder.

Remember that tragic incident in Cavite a few weeks back when a firecracker plant blew up and nearly wiped out a neighborhood? Let’s hope that for want of political will the same sort of tragedy does not happen with, this time, a sloppily-run LPG plant.

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