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We agree with Senators: oil industry nationalization the solution to ‘oil blackmail’ – ANAKBAYAN

June 5, 2010

Nov. 10, 2009

Youth group Anakbayan today applauded as “timely” the statements of several members of the Senate in the face of a looming threat of oil shortage in the country.

Yesterday, Sen. Miriam Defensor-Santiago proposed a government takeover of local oil companies as a response to threats by the latter of an oil shortage. Also, Senators Aquilino Pimentel and Juan Ponce-Enrile called on the government to undertake importation of oil.   Local oil companies have been warning of an impending oil shortage in the country due to the oil price ceiling mandated by Executive Order 839 which was signed on October 20. Sen. Pimentel had previously condemned the shortage as “artificial”, saying it would only be caused by the outright refusal of the said companies to import crude oil into our country.

Anakbayan chairperson Ken Ramos described the projected oil shortage scenario “crude blackmail”, saying that the refusal of local oil companies to import crude oil was based on the assumption that they were losing money due to the ceiling, a claim which he blasted as “a work of fiction”.

Ramos cited a study of the Bagong Alyansang Makabayan which showed that before the EO went into effect last October 20, petroleum products in the country were overpriced by an average of P5.81 per liter. After the ceiling took effect, pump prices were only rolled back by around P2.00 per liter. He said that this was on top of “regular” profits made by oil companies from their products.

“When the oil companies say they are losing money, it only means that their profits are less than usual. In the face of such naked greed, nationalizing the downstream oil industry becomes the obvious solution” he said.

He explained that with a state-owned oil industry, prices of petroleum products could be brought down to lower levels because the State could afford to operate at a “break-even” rate or even at a loss. He said that the benefit it would have on consumers, small-and-medium enterprises, and other industries highly dependent on oil, would outweigh the occasional loss of profits. Thus, subsidizing oil prices should also be regarded as a social service.

“If state-owned schools and hospitals can operate without the concept of profit, why should such a vital commodity as oil be any different?” said Ramos. ###

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