The Insensitivity and Greed of Oil Companies in the Philippines

Greed fuels their operation. They consistently assert that the reason in frequently raising their products' prices is the world prices of the same.

I am not buying this claim.

While it is true that world prices of oil rise, local oil companies do not necessarily have to follow the same rate.

I believe that what really prompts oil companies to do this is their desire to maintain their exorbitant profit. To slash a small portion of it is, for them, already tantamount to a great loss.

A recent display of their greedy character is their adverse reaction to Philippine President Gloria Macapagal-Arroyo's order to freeze oil prices to its October 15, 2009 rate in the light of calamities that hit the country.

Immediately, executives and spokesmen of various oil companies warn of possible oil supply problems that, according to them, could translate to investment repercussions because of the issuance of Executive Order No. 839.

Edgar Chua, country chair of Shell companies in the Philippines, was quoted in an October 27, 2009 Inquirer report to have said: "We will comply. We have no choice, but (the executive order) has serious implications not only to the supply of products in the country, but also to investments."

Fer Martinez, president of Eastern Petroleum, added in the same report: "Already, Flying V Philippines and Total Philippines said they are canceling their importation (of petroleum products). That's dangerous, when people stop selling."

Arroyo issued EO 839 on October 23, 2009 in response "to the clamor of the Filipino people to prevent unreasonable increase in the prices of petroleum products during the state of calamity."

The country was placed by Arroyo in a State of Calamity on October 2 after it was badly hit by typhoon Ondoy and in anticipation of the severe impact of typhoon Pepeng. The coverage of the declaration was later reduced within Luzon.

"The government must exercise the powers conferred upon it within the limits set by the laws to prevent predatory pricing, unreasonable pricing, cartelization, among others, which the oil industry players may resort to," Arroyo explained in her Order.

In specific terms, Justice Secretary Agnes Devanadera laid out the importance of controlling the prices of petroleum products during the time of calamity. The Inquirer report quoted Devanadera to have said that "rehabilitation efforts in Luzon could not make headway because of the rising fuel prices."

But, oil companies do not see this, or are insensitive to this. They are just concerned about their profit, and nothing more.

Aside from the subsequent oil prices they implemented after the onset of Ondoy and Pepeng, take this statement of Chua in the same Inquirer report as proof of their greed and lack of social responsibility: "Would you consider higher public interest for products to be cheap but not available, or for products to be expensive but reflecting the true cost, but available?"

Why pose this question to others when he himself could answer it? If they are for public interest and not after their profit, he himself could say, for example, that "as part of our social responsibility, we will still make the product available, never mind the big slash on our income or profit."

Huge oil companies such as Shell and Petron are really unlikely to be suffering from profit loss on a yearly basis. I will stand by this belief unless I am shown official audit reports of these oil companies' books showing otherwise.

They can always claim that they will suffer losses if they don't increase their prices. But, in Filipino, I'd say, laway lang yan. And for me, that "loss" that they are saying only means "smaller profit," and not "negative profit."

Arroyo was right in issuing EO 839, and should not be cowed by the statements of oil companies.

House Speaker Prospero Nograles just treats this reaction as an attempt to blackmail the government. But he said the government has the final say, whatever happens.

"A supply shortage will open a crisis in which government can interfere in accordance with the laws on the matter. This kind of threat or mild blackmail won't fly," Nograles said in another Inquirer report.

So, to all oil companies in the Philippines, may your greed eat you all up. There will always be people in government who will be there for the ordinary Filipinos./END