MANILA, Philippines – The Department of Energy (DOE) has ordered Mindanao oil players to explain the unusual price reductions in gasoline products which is considered as anti-competitive behavior under the law.
Based on the monitoring of the DOE-Mindanao Field Office (MFO), the oil companies from Aug. 30 to Sept. 6 cut prices a sizable P3 per liter on the average.
Elsewhere in the country, oil companies raised gasoline prices by 50 centavos per liter during the period, reflecting the uptrend in the global market amid positive signals over a production freeze among major oil producers.
While price rollbacks are a welcome development for the consumers, the DOE cautioned that sudden and sustained huge decreases in oil prices might qualify as an anti-competitive behavior under the Oil Deregulation Law.
“This market behavior puts both the smaller oil players and the consumers at a disadvantageous position in the long run. Smaller oil players may actually lose its market share and end up closing, allowing the remaining oil players the chance to dictate prices to the detriment of the consuming public,” the DOE said.
This market behavior could also spark more peddling of petroleum products through the “bote-bote” scheme and the alleged smuggling of oil products from nearby countries.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
The DOE said its Mindanao office has been coordinating with local government units (LGUs) and the Bureau of Fire Protection to eliminate the “bote-bote” scheme while also discouraging consumers from patronizing such activity as this may endanger public safety and health.
Peddling of liquid fuels in any container is strictly prohibited, as stipulated under Department Circular DC2003-11-010 also known as the Retail Rules. Improper handling of liquid fuels may lead to accidental fire, illnesses due to inhalation of hazardous fumes and undesirable effects to the environment.
The DOE is also in talks with the Bureau of Customs on the alleged smuggling of oil products “as this may hurt not only the oil industry players, but also the economy of LGUs in Mindanao and the rest of the country.”
“Taxes are lost, affecting the delivery of basic services to our people,” it said.
The agency is closely coordinating with the Department of Justice for the possible convening of the DOE-DOJ Task Force to determine any violations of the law.