Posts tagged with oil deregulation

A student spray paints the words "Stop Oil Price Hikes" after throwing red paint and rotten tomatoes at the Petron office building in Makati during a rally against the rising cost of gasoline, diesel and other oil fuels, Friday June 20, 2008 (AP Photo/Bullit Marquez)

The recent and unabated spikes in the price of gasoline and other petroleum products characterizes and manifests the decades-old national exploitation by the oil cartel and the inutile and subservient character of the present Philippine government to the whims and caprices of foreign and local profiteers.

Consider these:

(1) Oil companies are making a killing, reaping billions in profit every year
The pump price of diesel has already increased by P6.75 per liter since January; kerosene, P6.50, and gasoline, P6. Petron posted a 59% increase in profits, or P5.4 billion, for the first nine months of last year. In 2009, the same oil company posted a profit of P4.3 billion. Pilipinas Shell posted a P7.6 billion profit for the first nine months of 2009. It posted P5.07 billion in profit in 2008, the year when oil prices jumped to its highest in recent history. In the Top 1,000 corporations in the Philippines in 2009, Petron placed first with gross revenues of P288.8 billion in 2008. Pilipinas Shell was second, and Chevron Philippines (Caltex) was fifth.

(2) There is no shortage in supply
None of our oil comes from Libya, and yet oil companies invoke the Libyan unrest as if it’s causing a major disruption in the global supply of oil to justify price hikes in the Philippines. Libya accounts for less than 2 percent of global oil output and yet oil companies are invoking the unrest to jack oil prices in the same levels as in 2008. Saudi Arabia and other OPEC countries have repeatedly stated that whatever production shortfall is happening in Libya is being compensated by increased output in OPEC countries. Clearly, there is no real shortage.

The oil price hikes allegedly due to the unrest in North Africa and the Middle East is clearly another product of speculation and wanton profiteering. Rep. Neri Colmenares of Bayan Muna said that the crisis in the Middle East is such that “it has become a cash cow for the Big Three.”

While a reasonable profit and return of investment is expected from oil companies, their greed should not be satisfied at the cost of exploiting the Filipino people. Clearly, the exploitation of oil companies has been exorbitant and shameless.

(3) Shameless overpricing by as much as P7.50 per liter
Arnold Padilla of BAYAN claims that “from 2008 to January this year, oil firms have implemented price hikes that were bigger than what changes in global prices and foreign exchange warrant. Similarly, they also implemented smaller rollbacks. The net result is an overpricing of around P7.50 per liter.” Oil companies squeeze an estimated P370 million everyday in extra profits from overpricing.

Indeed, oil companies have always been slow in rolling back prices when the cost of petroleum in the world market drops but are always quick to hike when the cost of petroleum in the world market increases. The Oil Deregulation Law has only given oil companies the right to manipulate oil prices that leads to arbitrary pricing and other illicit schemes to unjustly profit.

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The past weeks saw various protests against the impending hikes on train fares in Metro Manila, aggravated by the simultaneous hikes in other transport services, from toll rates to taxi fares, and hikes in basic commodities, from fuel to milk, to bread. Public utilities (controlled by private companies) are also set to increase their rates in electricity and water. In the next few weeks, schools are seen to propose increases in tuition and other fees, as they do annually this time of the year. All these hikes are under the willing sanction of the government, in the name of free market dogma and hypocrisy of neoliberal economics.

On the other hand, while the government accommodates all attempts at raising prices of services and commodities, it is adamant at insisting that wage increase is untimely thereby forcing millions of Filipino families against the wall as they cope and make do with their meager wages. With rising prices of commodities and services, the cost of daily living in Metro Manila is expected to breach the P1,000.00 per family (of six) per day threshold, while the minimum wage remains stunted at P404.00, often violated by profit-hungry businesses with the exceptions granted by the government. If you’ve heard about the death of the ten construction workers in Makati, you also ought to know that they were reportedly only being paid P260.00 a day. Watch this case study made by GMA 7″²s Saksi of a gasoline boy who earns P7,700 a month but has to spend an additional P700 if the hike on train fare continues jacking up his monthly expenses to P8,800. Hindi ko alam saan niya kukunin ang kulang. Wala pa diyan ang ibang price hikes.

Notwithstanding the legitimate grievances of small and medium enterprises, big businesses controlled by multinational and local tycoons and landlords are feigning imagined and prospective losses in order to justify their unreasonable refusal to any proposal to increase wages. At the same time, however, you see them posting record profits and reporting billions of pesos in overseas investments in business papers. Government even claimed that the economy grew by more than 7% last year. Business is booming, but ah, how odd, isn’t it hunger incidence is on the rise. It is a fact, in the present order, everything is in the interest of capital, everything is laid on the altar of free market economics and profit. There’s a reason minimum wage is minimum. Workers’ share in the wealth of an industry is kept to the barest minimum, an amount enough to keep a worker in threshold of survival, just enough to make him survive a for a day to be able to go back to work the next. There’s a reason wage is called “˜sahod’ in Filipino. Sumasahod lang ang manggagawa sa kung ano nag matitirang mumo while profiteers feast on the wealth that the workers have created.

As with any situation, the government is supposed to balance the interests of all parties concerned. In this kind of situation, however, where balancing of interests will inevitably lead to the irreconcilable contradiction between public service and private profit, the choice of a genuinely pro-people government should be clear. Ordinary people have unjustly been compromised long enough.

May 12, 2008. Last May 12, the University Student Council (USC), through some of its members, in solidarity with the transport sector, participated in the nationwide transport strike. We released an article-statement and helped organize the picket at Philcoa. We even helped prepare lunch, which was simply monggo and rice, for everyone at the picket while we were in Pook Dagohoy.

I didn’t quite stay long enough at Philcoa. After taking the lunch from Pook Dagohoy to the people at the picket, I just stayed for less than an hour taking a few photos and talking with some of my counterparts in the USC and STAND-UP.

Transport Strike (May 12, '08) Transport Strike (May 12, '08) Transport Strike (May 12, '08) Transport Strike (May 12, '08) Transport Strike (May 12, '08) Transport Strike (May 12, '08)

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