Scrap oil deregulation, set up gas stations – SP

Bohol Capitol lawmakers have urged Congress to again regulate the nation’s petroleum industry and provide funds to stabilize the oil prices.

They had asked Gov. Edgar Chatto to direct the Provincial Economic Enterprise and Management Unit, Provincial Internal Audit Office and Provincial Legal Office to conduct feasibility studies on the legality and viability of setting up province-owned gas stations.

They formalized the two calls in separate resolutions approved and adopted by the Sangguniang Panlalawigan (SP) as introduced by Board Member Tomas Abapo, Jr.

Abapo noted that while petroleum prices fluctuate depending on the world market movement, the fluctuation is more on the price increase rather than lowering.

As an adverse effect, the prices of the prime commodities go up when oil prices get high, and when the latter go back down, it is unlikely that the former follow.

Ordinary earning Filipinos who number by numerous millions do economically suffer the consequences, the board member said.

REGULATED PAST

Abapo recounted the time when the oilprices in the country were stable despite the price fluctuation in the world market.

This was when the Philippine prices of petroleum products were regulated by law and there was also the Oil Price Stabilization Fund (OPSF).

Then Republic Act 6173, which was enacted in pre-martial law 1971, had regulated the petroleum industry to assure reasonable prices and prevent collusive practices in oil pricing.

The OPSF was created in 1984 by then Presidential Decree 1956 to assure stable oil prices.

The buffer fund, Abapo said, had subsidized the oil price increases and so the Filipinos could then buy oil products at the same price.

The SP member from the Second District could only further recall that he then had to spend P200 only for car gas for a Tagbilaran-Ubay-Tagbilaran roundtrip.

“Now, my P1,000 can barely bring me back from Ubay to the city,” he said.

“Why?” Abapo asked in his privilege speech in the SP session on Friday, and then gave answer to his own question, “It is because the oil industry is now deregulated.”

In 1998, Republic Act 8479 deregulated the oil industry and the oil companies may now even fix their own prices, the provincial legislator said.

Deregulation generally means the lifting of government control and letting market forces work in the business.

For the local oil downstream industry, the concept of deregulation covers price decontrol, removal of restrictions on the establishment and operation of facilities, as well as importation and exportation of crude oil and petroleum products.

RA 8479 is known as the “Downstream Oil Industry Deregulation Act of 1998,” which four major reasons for enactment are to stabilize and provide reasonable prices, encourage competition, encourage investments, and remove cross-product subsidies.

So, accordingly, Abapo said, the purpose of the deregulation is to ensure a truly competitive market through fair business competition.

But the purpose has not been achieved simply because it has not happened, the board member said, quickly adding that the oil prices have shot up instead.

Abapo said the oil companies have not competed against each other to lower their prices but to increase them instead.

A position supported by SP colleagues, Abapo said it is high time to repeal the deregulation law and for the government to again regulate the oil industry, especially the prices, a position supported by his SP colleagues.

Abapo cited the Malampaya Funds to subsidize oil price increases attributed to the world market forces.

By law, the funds should be used to finance energy-related problems, said Abapo who is a lawyer and a law school dean.

GOVERNMENT GAS STATIONS

Abapo could not understand why the oil prices in Bohol are more expensive, if not extortionate, than those in Dumaguete City in Negros Oriental, Cebu and other nearby provinces.

In his research, gas stations in nearby provinces can still rake in profits even if their products are sold cheaper.

”Why can’t then we sell at lower prices, at par with other provinces, and still incur profit?” Abapo asked.

He told his fellow board members that their constituents “are suffering, asking for their help, and it is time for the province to do something.”

Under the Local Government Code of 1991, Abapo said, the province can enter into a business enterprise.

He asked, again, “So, why don’t we in the provincial government set up our own gas stations, sell petroleum products at lower prices, and yet still gain?

The board member suggested for the province to start with five gas stations, two of them in Tagbilaran City and one in each of the three congressional districts.

‘BUILT-IN CLIENTS’

The Provincial Engineering Office, Provincial Motor Pool and all other departments can become “built-in” and “walk-in” customers instead of them buying gas from private stations.

The capitol-run stations can provide for the oil needs of the provincial government, Abapo stressed.

Abapo believed that, more importantly, “we can sell gas to the public at lower prices, at par with the other provinces.”

The feasibility studies will be in order to find out if the option of the government to operate its own gas stations is both legally and financially feasible.

Abapo said, “Our goal is to serve our people. Lest we forget, a public office is apublic trust.  We are here not as masters but servant leaders.”

The resolution asking Congress to abolish the oil deregulation law and provide oil price subsidy will be sent to the Senate president and House speaker, as well as all the provincial SPs nationwide for possible support. (Ven rebo Arigo)

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