For the past six months the Filipinos seemed to have enjoyed the continuing decrease in fuel prices. From a high of between P45 to P60 per liter of fuel (diesel, kerosene, and gasoline) in the first six months of 2019 the price slid gradually per liter starting the second half of the year although not quite big in amount.
However, when the corona virus disease (CoVi D 19) pandemic started bringing the world’s economy to its knees since the onset of the current year, the cost of oil per barrel in the world market stumbled. The huge loss in demand of oil products caused big price cuts that seem to benefit the consumers especially the industrial and commercial ones, including individual vehicle owners.
The other week though, the members of the Organization of Oil Products Exporting Countries (OPEC) announced that they will cut the level of production by the millions of barrel per day. This, they said, is the only way to save the world’s oil industry from perdition.
Immediately following was the announcement by the oil industry players that they will implement a one big-time increase in fuel prices. Now, how will this price hike in oil products impact on the country’s already crippled economy? How much suffering will the increase add to the people already losing their livelihood sources because of the lockdowns mandated by government to stop the pandemic spread?
How is the Department of Energy (DOE) bracing itself for the impact of this other “contagion” that is sure to flatten the already kneeling people on their stomach?
We can remember clearly that sometime last year the Department of Energy humbly admitted that it is powerless to curb the spiraling cost of petroleum products.
Yes, the DOE rather grudgingly said then that as far as regulating the prices of oil products in the country is concerned, it is helpless. And ironically, it even acts as “apologist” for the different oil companies for their wanton increase by citing that they have no authority in looking into the fairness in the determination of the operating cost of the oil companies as well as the retailing stations.
So inutile is the DOE that the only comment it makes on the issue of too high the price of fuel in certain areas of the country is that the local government should come in the picture because the operation of these gas retailers is right in its jurisdiction.
This ineptitude of the DOE and its apparent subservience to the oil cartel, the big ones specifically, is already very alarming. And many seem to think that the regime when the oil industry was still being regulated by government was better than the present situation.
Yes, we can still vividly remember the then big 3 oil players in the country had to haggle to the teeth with government’s regulatory restraints. Before they can increase their per liter retail cost, fuel retailers, together with the oil industry overlords, had to pass the proverbial needle’s eye before an amount of increase is granted.
Unfortunately, when the EDSA people’s revolt ousted the Marcos regime, the then strongly regulated oil industry was deregulated supposedly to allow the movement of world prices of oil products to determine the retail distribution rate.
Yes, the smashing of the regulated regime allowed the entry into the industry of several new players with one now closely catching up with the big three as far as the country’s market is concerned. The proponents argued then that the entry of new players will create healthy competition that would result to lowering of the retail prices of fuel products.
But alas, the newcomers, except for a few, became members of the cartelized industry. Instead of offering lower price per liter they simply adopt whatever is the price set by the big three players.
Today, when the players announce adjustments in the retail cost they do it simultaneously. They also implement the same price hike at the same time.
Worst, there is no assurance that the fuel products they sell starting on the implementation of an increase are already part of the new purchases from petroleum exporting countries that is covered by the global price movement. In the same vein people cannot be certain whether the DOE indeed is religiously monitoring whether there is indeed a spike in the price of oil products in the world market. They are only dependent on global business news sources for such information.
Thus, there is this probability that the fuel products sold at gasoline retailing stations using the supposedly higher import price are still part of old inventories purchased at a much lower cost per barrel.
Now, based on the latest situation report of the CoViD pandemic, it appears that its end is not yet in sight. But in the midst of this grim reality, the greedy oil producing countries are already starting the hike of prices of their globally needed products.
We can only imagine what the OPEC is planning to do when the pandemic is over and the world’s economy starts rolling all over again.
For certain they will recoup their lost income as fast as they can.
As for us Filipinos, is there anything we can hope from the DOE, or the government for that matter, to cushion us of the impact of the OPEC leaders’ greed?
