Oil price-fixing claims baseless — DOE

Manila, Phillipines — The Department of Energy (DOE) has branded the price-fixing and collusion allegations by a consumer group as baseless.

Laban Konsyumer Inc. (LKI) earlier filed a complaint with the Philippine Competition Commission (PCC) against 15 oil companies for alleged price-fixing collusion and cartel.

In its complaint, LKI accused the DOE of allegedly abetting and facilitating price fixing, collusion and cartel by oil companies by using a pricing formula that violates market competition and the law.

”We find the complaint of LKI president, Atty. Victorio Mario Dimagiba unmeritorious by accusing the Department of colluding with the oil companies by pointing to the pricing formula posted on the DOE website, as having facilitated said unacceptable illegal activities,”the DOE said.

LKI said the pricing formula used by the DOE does not consider in the computation the corresponding explanation and supporting documents on the cause/s or reason/s of the movement of the individual  price adjustments, to include, among others,  the international content, taxes, duties and biofuel cost

The DOE said the pricing formula in question has been posted in its website since 2010.

“The posting is made in the interest of transparency. The formula is not being prescribed nor dictated by the DOE to the downstream oil industry in any way, as claimed by Atty. Dimagiba, but is being made publicly available to serve as a tool for all parties interested to understand and evaluate domestic oil price movements,” the DOE said.

According to the DOE, the price regulation of the oil industry was removed due to the passage of Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998. 

“With the ERB formula having been utilized by the board in the performance of its functions over the course of 11 years, the DOE deemed it fit to adopt said pricing formula among all other alternatives due to its historical reliability,” the DOE said.

“We have explicitly indicated on our website that the Oil Deregulation Law does not prescribe any specific pricing formula, as the market is expected to set the prices. This was followed by a statement reminding industry players to adhere to the fundamental principle of fair prices, as provided under the Oil Deregulation Law,” it added

The DOE stressed that through its Oil Industry Management Bureau (OIMB), it has always been dedicated to its mandate to protect the public against cartelization and predatory practices by closely monitoring actual oil price movements, specifically to prevent unreasonable adjustments and abuses.

“And whenever discrepancies do arise, the DOE-OIMB in fact has been consistent in issuing show cause orders to concerned oil companies, requesting them to provide pertinent documents and a formal explanation on how they arrived at their respective oil price calculations,” the DoE said.

Among the 15 oil companies are Chevron Philippines, Inc., Petron Corp., PTT Philippines Corp., Pilipinas Shell Petroleum Corp., Total Philippines Corp., SeaOil Philippines, Inc., Phoenix Petroleum Philippines, Inc. Unioil Petroleum Philippines, Inc., Jetti Petroleum Inc., Eastern Petroleum Corp., City Oil Philippines, Inc., Filpride Energy Corp., Clean Fuels Philippines, TWA Inc., and Petro Gazz Ventures Corp.

Meanwhile, the DOE continues to assure the public that it will not waver in its commitment to protect and uphold the welfare of consumers.