Big oil players are not worrisome, retailers are
FULL DISCLOSURE - Fidel Abalos (The Freeman) - November 18, 2019 - 12:00am

Recently, Laban Konsyumer Inc. (LKI) “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.”

As expected, the DOE trivialized this price-fixing and collusion allegation and branded it as devoid of basis stressing that with the passage of Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998, the price regulation of the oil industry is already removed.

Agreeably, the oil industry is deregulated. However, even if we say, the industry is deregulated, we wish to emphasize to the DOE and the PCC that this complaint is still worth delving in. First and foremost, we wish to stress to the DOE that we, consumers, are buying from the retailers, not from the oil importers. Therefore, what burden us are the prices of the retailers.

For instance, for the same global brand, a retailer situated at the South Road Properties (SRP) sells special gasoline at P3 to P4 cheaper than most retailers in the other parts of Metro Cebu.

Since these retailers have the same supplier/importer and have practically the same logistical costs, their prices should have been more or less the same. The truth, however, is that price disparities are huge and are really hard to stomach.

Thus, we may ask, “Is this gas retailer at SRP more ethical than the retailers in the other parts of Metro Cebu?”

Such question is really apt because if the prices are based on the global price movements, then that of the retailer at SRP should be more appropriate.

Truth be told, driven by greed, some of our retailers refuse to be fair and simply cash in or take advantage in all situations. As observed, as clear as daylight, when global oil prices go up, automatically, some oil retailers raise their prices not later than tomorrow, as if they just purchased their inventories today. When prices go down, these same retailers do not reduce prices automatically. Well, logically, because what they have in their tanks were purchased when prices were still high. Simply put, they come straight when global prices go down but are cheats when prices go up.

Given this scenario, price manipulation is possible. So that, it should be very appropriate for the DOE, PCC or the Department of Justice (DOJ), through the National Bureau of Investigation, to look into these malpractices, such as, hoarding, profiteering and cartel-like activities. These are malpractices that were so prevalent in the past and so pervasive in times of calamities or global price changes.

Section 5 of Republic Act No. 7581, otherwise referred to as the "Price Act", is so explicit as far as these “illegal acts of price manipulation” is concerned. It considers unlawful, such acts as, hoarding (which is the undue accumulation by a person or combination of persons of any basic commodity beyond his or their normal inventory levels or the unreasonable limitation); profiteering (which is the sale or offering for sale of any basic necessity or prime commodity at a price grossly in excess of its true worth); and cartel (which is an agreement between two or more persons to artificially and unreasonably increase or manipulate their prices).

Of the aforementioned malpractices, hoarding and profiteering can be easily done through ocular inspection and surveillances. Cartel is quite difficult. However, knowing fully well that the same DOJ (through the NBI) is in its fold the Office for Competition, then, any cartel-like practices can be effectively investigated.

To recall, the Office for Competition (created through Executive Order No. 45, series of 2011) was established to, among others, enforce competition policies and laws to protect consumers from abusive, fraudulent, or harmful corrupt business practices. Obviously, therefore, if DOJ renders its task honestly and effectively, cartel-like practices can be easily detected.

Indeed, our laws are broadly complete. It is just that maybe, some unscrupulous retailers are just toying with these laws and have unduly taken advantage of the general public’s helplessness. Truth to tell, we are known all over the globe as friendly and hospitable. Though such trait is admirable, its downside, however, is inexplicably outrageous. Our yielding nature has been a thorn as we give in so easily even to the most unethical proposition. Such submissive attitude is more often abused by people who are too selfish and too wanting to rule, dictate and dominate. Sadly, these are characteristics that happen to be requisites for a cartel or any unethical/illegal practices to exist.

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