DOE finalizing policy to unbundle fuel prices

MANILA, Philippines — The Department of Energy (DOE) is working to finalize the unbundling of fuel prices to put more teeth in monitoring prices of petroleum products and protect the interest of consumers within the first quarter.

This circular will provide guidelines for the monitoring of prices of petroleum products – gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil and household and automotive liquefied petroleum gas (LPG).

The draft circular is scheduled for one more public consultation before it is finalized and submitted for signing to the secretary, DOE undersecretary Felix William Fuentebella said.

The consultation will be focused on the industry take’s cost component of petroleum products.

This is the contentious part where the profit margin and operation cost of oil companies are indicated, DOE-Oil Industry Management Bureau (OIMB) director Rino Abad said.

“There are eight major items in the cost component. Seven have been agreed to in the first consultation and the remaining item is the industry take,” he said.

The commitment set to issue the circular is first quarter,” Abad said.

Under the draft circular, oil companies would be required to provide a weekly notice of the price adjustments (decrease, increase or no adjustment).

The report would also include the computation of their products’ components based on the elements involved in the international price movement which cover product cost, freight cost, insurance and foreign exchange, and in the local component which are duties, taxes, and industry take.

The DOE policy would also require the oil companies/bulk suppliers and retail outlets to submit baseline data every end of the year for the unbundling of their base price and to comply as well with the mandatory price display board.

 The new policy is pursuant to DOE’s mandate under Republic Act 8479, or the Downstream Oil Industry Deregulation Act of 1998, to monitor both international and domestic price movements of petroleum products.

Consumer advocacy group Laban Konsyumer Inc. has been pushing for transparency in retail prices of petroleum products as part of end-users’ right to information and to provide them access to fair and reasonable pricing of petroleum products.

The consumer group said oil companies and the new players have practically uniform prices for diesel even as industry players procure their products differently and engage in activities such as refining, while the new players import finished products.