THE DEPARTMENT of Energy (DoE) is not ruling out the possibility of cartelization among oil industry players as it continues to monitor any anti-competitive practices.
“I would not say that there is no cartel. Who they are, that is something to confirm, but if there is no cartel, there’s no purpose for OIMB (Oil Industry Management Bureau) to be on guard all the time,” DoE Officer-in-Charge Sharon S. Garin said in a press briefing on Wednesday.
“But I would say there’s still some form of anti-competitive behavior in some, not all,” she said.
Questions on cartelization floated due to seeing similar price adjustments despite varying costs of supply procurement.
Under the Republic Act (RA) No. 8479, the Downstream Oil Industry Deregulation Act of 1998, cartelization refers to “any agreement to fix prices either by products or by areas, in restraint of trade or free competition.”
RA 8479 aims to liberalize and deregulate the downstream oil industry by removing the government’s power to directly control oil prices and instead allowing market forces to determine pricing, aiming to foster a competitive market.
OIMB Assistant Director Rodela I. Romero explained that oil companies based their price adjustments on Mean of Platts Singapore, a benchmark used for refined oil products, as well as Dubai crude.
“It’s [the monitoring of cartelization] still a working progress because even the smuggling is still not curtailed,” Ms. Garin said.
She said that there are “disparities” on the imports being reported, which is among the things that the DoE is working with the Bureau of Customs.
“I do believe that there are still players that have yet to play according to the rules, if you ask me. There are still distortions in the reporting, in our observations there are even mistakes,” Ms. Garin said in mixed English and Filipino.
While the DoE has no police powers, Ms. Garin said that the DoE observes possible smuggling activity and endorses to authorized agencies, including the Bureau of Internal Revenue, the Department of Finance, and the Philippine Competition Commission.
On Tuesday, several oil firms implemented a rollback of P0.70 per liter for gasoline, P0.10 per liter for diesel, and P0.80 per liter for kerosene. — Sheldeen Joy Talavera
