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Latest oil price hike shows Big 3’s Arroyo era-style profiteering continues under Noynoy – Anakbayan

January 19, 2011

Youth group Anakbayan slammed today’s increase in petroleum products’ prices, calling it proof of the Aquino administration’s ‘tuloy-tuloy na pagkatuta sa kartel ng langis’ (continuing servility to the Oil Cartel).

“There is no basis at all for the latest oil price hike, or for any this year for that matter, seeing that local petroleum products remain overpriced by the end of 2010” said Anakbayan spokesperson Vencer Crisostomo.

Based on the computation of progressive umbrella group Bayan, local oil products were overpriced by P6.72 per liter. Since the start of 2011, oil companies have hiked their prices thrice, the latest which is today where gasoline and diesel prices were increased by P0.75 per liter and P1.00 respectively.

The youth leader mentioned three ways in which the ‘Big 3’ has overpriced their products: using the changes in crude oil’s price in the world market and/or changes in the peso-dollar exchange as an excuse, the fact that the ‘Big 3’ imports their crude oil from their ‘mother’ companies, and ‘transfer pricing’.

In the first method, oil firms frequently cite increases in crude oil’s world market price and the lowering value of the peso to the dollar as reasons for hiking their prices. However, these companies always have a stock of oil that is good for three months. Hence, the products oil firms are selling at ‘new prices’ comes from a stock which is actually lower priced.

In the second method, which is related to the first, oil firms cite increases in crude oil’s world market price but do not actually buy their crude oil from the world market. The ‘Big 3’, which are local branches of global oil corporations, get their stocks from their ‘mother companies’.

And the third method, related to the first two, involves the ‘mother company’ (for example, Dutch Royal Shell is the ‘mother’ of Pilipinas Shell) selling their crude oil to their local branch at already overpriced rates.

“The overpricing of petroleum products has been a recurring grievance under Gloria Arroyo. But it seems the current administration is not keen in being different from its predecessor, at least in this issue” said Crisostomo.

He added “We doubt that his Cabinet is as stupid as they presently appear. We are sure the Aquino administration is aware of the impacts of the oil price hikes, coupled with the fare and toll hikes, have on the Filipino people. But despite that, Noynoy isn’t taking any action against the increases”.

“Apparently, the government’s priority is ‘profits first, people second’” quipped the youth leader.

Anakbayan is a militant group of young workers, farmers, professionals, migrants, and students which was founded in 1998. It is one of the conveners of the Strike the Hikes Movement, a recently-formed alliance against the spate of fare and other recent price hikes. ###

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