Consumer group pushes transparent oil pricing

MANILA, Philippines — Consumer advocacy group Laban Konsyumer Inc. (LKI) is pushing for transparency in retail prices of petroleum products and the regular maintenance of power plants as part of end-users’ right to information and to provide them access to fair pricing of petroleum products and electricity.

In a letter to Department of Energy (DOE) Secretary Alfonso Cusi, the group stressed the need to unbundle the retail prices of petroleum products so that consumers may be provided the necessary information regarding fair pricing of petroleum products.

It 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.

Even with Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998, LKI president Vic Dimagiba said the DOE chief has the power to issue the circular mandating the unbundling of retail prices of petroleum products.

He pointed out the DOE police powers under Sections 7, 11, 12, 13, 14, 15, 18 and 19 of RA 8479. LKI believes that the unbundling will ensure transparent pricing that will benefits the consumers.

“We believe that the DOE secretary is authorized to issue the circular mandating the unbundling of retail prices of petroleum products… Even under full deregulation, the DOE secretary is authorized to ensure fair pricing of petroleum products for the benefit and information of the consumers,” Dimagiba said.

Earlier, the DOE said it would come out with a circular directing oil companies to unbundle their prices and to explain their respective price adjustments.

On power rates, LKI said the DOE “should publish the regular maintenance of the power plants and energy suppliers over the next 12 months and inform the consumers of the reasons for any unexpected shutdown, particularly during peak hours.”

Dimagiba said the Luzon grid was placed on yellow alert, which pushed wholesale electricity spot market (WESM) prices from P15 per kilowatt-hour (kwh) to P30 per kwh during the trading period.

The consumer group also said similar forced outages and shutdowns regularly occur during the hot season and publishing an accurate and on-time detailed information on the reasons for the shutdown can dispel perception of any form of collusion among power plants and energy supplies resulting in spikes in the WESM prices and interim bilateral purchase agreements.

Manila Electric Co. (Meralco) – the country’s largest power distributor – announced higher rates in the past two months, an additional P0.85 per kwh in March and P0.225 per kwh in April, mainly due to higher spot market prices because of tighter supply conditions in the Luzon grid.