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Oil crisis and the people's response
Posted February 6, 2006
 Petron's partial privatization started in 1993 when 40% of its total equity was sold to the Arabian American Oil Company (ARAMCO).
QUEZON CITY - "Pump prices for oil is over-priced by P2-P6 per liter."
In a forum dubbed "The People's Response to the Oil Crisis" recently, Arnold Padilla of IBON Foundation stressed that pump price in the Philippines is dictated by world overpricing. IBON data show that from January to October of 2005, the Big 3 oil companies, namely Petron, Caltex and Shell earned 6 billion per day on regular gasoline, 0.52 billion for diesel and 0.3 billion for kerosene. Petron holds 38% share of the total oil market, Shell 33% while Caltex enjoys the 16% share.
Meanwhile, Prof. Danilo Arao of Kontra Kartel called for the repeal of RA 8479 or the oil deregulation law. He also called for the nationalization of Petron and the lifting of taxes for all petroleum products.
Padilla, on the other hand also called for state regulation of Petron as an alternative. He stressed that the state needs to centralize procurement of imported oil, and that there should be an oil buffer fund to cushion the impact on consumers of the rising world prices.
An alternative oil trade must also be considered by the government. Further, the state should take active involvement in oil exploration, refining and distribution, Padilla added.
There will be far reaching and graver impact on the economy when the government fails to nationalize the oil industry, said Padilla. As it is now, there are three actual effects manifested by the oil deregulation: unabated increase of oil prices, differences in pricing depending on location and prevailing competition, and the coming in of foreign industry players which until recently amounts to 60%.
When deregulation continues, Prof. Arao foresees a gloomy scenario for the masses. There will be deregulation in the land transportation franchises and consequentially, deregulation in the public transport sector fares.
Thus Prof. Arao asserts that nationalisation is not an option anymore... Nationalisation of oil industry is an absolute necessity.
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Barrio is a Spanish word meaning district or neighborhood. In Mexico, the Philippines and other Latin American countries, barrios are generally cohesive places: sharing, for example, a church and traditions such as feast days.
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Josua L. Jaena
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