THE OUTGOING chair of the Senate energy committee on Wednesday said it “may take time” to amend the Oil Deregulation Law to include provisions that will make oil prices more transparent through unbundling of costs.
“The solution to amend the Oil Deregulation Law is not an immediate solution (to rising oil prices), it is a long-term solution,” Senator Sherwin T. Gatchalian told the media in a briefing.
Changes in the law should ensure “transparency in terms of pricing, volume of oil companies,” said the senator, “but we also have to respect their… proprietary secrets and business transactions because many of their contracts are proprietary in nature.”
During the committee’s consultative meeting with oil industry stakeholders on Tuesday, the Energy department said mechanisms should be set up under Republic Act 8479 or the Downstream Oil Industry Deregulation Act to determine real costs of fuel.
“The industry take is 19% — these include all other items that the oil companies have been adding on to the pump prices, that’s what we would want to inquire on,” Energy Undersecretary Gerardo Erguiza, Jr. said at the hearing.
To have proper safeguards, the government will have to receive information on the price of an oil company’s cargo, the date it was received and the costs of their inventory, Mr. Gatchalian said.
With such mechanisms, “the government can prevent abuses in times of abnormal international pricing,” he added.
As an immediate solution to the continuing oil price hike, the senator proposed an expansion of the cash aid program at P3,000 monthly for jeepneys drivers and P1,000 monthly for tricycle drivers over the next five months.
He said this will cost about P4 billion, which is lower than the P150 billion in potential income loss for the government if the excise tax is lifted.
“We can also expand the Libreng Sakay (free ride) program of the government, so those who stop plying their routes or plying the roads can be contracted by (the) government to serve the riding public,” he said. — Alyssa Nicole O. Tan