Oil giants, Chinese refineries, Dennis Uy gain much from oil profits
For the seventh straight week, oil companies have increased prices of petroleum products, much to the dismay and disadvantage of consumers and the public. Any increase in oil prices instantly affects goods and services through transport costs and other energy-related items in the Consumer Price Index. In April, transport prices grew 17.6% year-on-year and accounted for 1.4 percentage points of headline inflation for that month.
“Throughout the deregulation era, the Department of Energy (DOE) has become a mere announcer of oil price hikes. Deregulation under Duterte also caused much damage to the livelihood and economic status of Filipinos,” according to KMP Chairman Emeritus and Anakpawis Chairperson Rafael Mariano.
Starting 6 AM today, July 13, oil firms have increased prices by up to P1.15/liter for gasoline, P0.65/liter for kerosene, and P0.60/liter for diesel. Another big-time fuel price hike is possible next week, according to industry insiders. Year-to-date oil price adjustments stand at a total net increase of P12.35 per liter for gasoline and P10 per liter for diesel.
Oil companies are once again using as an alibi the week-on-week increase of global crude by an estimated US$0.55/barrel. Likewise, prices of gasoline in the Asian market reportedly reached their 18-month high levels early this month due to tightening gasoline supply from China, according to S&P Global Platts.
In 2018 after the TRAIN law and rising global crude oil prices impacted heavily on domestic oil prices, Malacanang proposed three directives: monitoring and arrest of suggested retail price violators, raising of minimum wages for workers, and importation of cheaper oil from non-OPEC member countries including Russia. However, these proposed solutions did not come about.
Oil prices have steadily increased as a result of the country’s 100-percent importation of refined petroleum products, mainly from Chinese refineries. In 2019, 64% of PH diesel imports came from China. From January to October last year, fuel imported from China surged by 434.1 percent. While global fuel prices slightly decreased in 2020 due to lower supply during the pandemic, its effects were not felt in the Philippines due to the additional 10% tax imposed by the Duterte regime on imported crude oil and petroleum products through Executive Order 113. The new taxes on imported crude oil aims to generate an additional P6.8-billion revenue supposedly for pandemic aid programs.
KMP estimates that based on the DOE’s monitoring of oil prices, from 2017 to 2021 under Duterte, prevailing petroleum prices have increased by as much as P16.25/L for gasoline, P12.76/L for diesel, and P18.97/L for kerosene. The computation is based on the difference between common fuel prices on January 3, 2017, and June 30, 2021. The peasant group said there were more oil price hikes than price rollbacks annually, and that oil prices have remained in the upward trend for more days in a year.
“Oil price hikes have direct and lasting effects on agricultural and fishing production cost, cost of farm inputs, and overall cost of living for Filipinos. Malacanang and DoE have abandoned the people and allowed oil giants to rake in billions from oil price adjustments. In fact, the government alone earned P218.05 billion in tax from September 2019 to April 2021 from 22.40 billion liters of marked fuel products,” said KMP leader Danilo Ramos.
Despite experiencing a slump early into the pandemic, oil companies are recovering and posting revenue growth by the end of 2020. Petron Corporation ended Q4 2020 with consolidated revenues of P69.6 billion, Pilipinas Shell launched a new import terminal early this year and earmarked P20 billion for its capital outlay. Duterte crony Dennis Uy-led Udenna Group paid $565 million for a 45% controlling stake in Chevron and eventually gained a controlling interest in the Malampaya gas field project following the acquisition of Shell Petroleum’s 45% stake for up to $460 million. Clearly, Duterte and his minion Uy have a lot to gain from the oil industry at the expense of Filipinos. ###
Reference: KMP Danilo Ramos, 0975-2022621
Oil Prices under Duterte
(Estimates per liter based on DoE monitoring 2017-2021)
|January 3, 2017|
|June 30, 2021|
Estimate difference between January 2017 and June 2021 fuel prices:
|Range of Price Difference|