LKI pushes transparency in oil and electricity prices

2018-04-17 00:00:00 PRESS RELEASE
April 16, 2018
Consumer group calls for the right to information on petroleum products and electricity prices
PRO-CONSUMER advocacy group, Laban Konsyumer Inc. (LKI) have recently called on the Department of Energy (DOE) to enable consumers to enjoy their right to information, and thereby provide them access to fair and reasonable pricing of petroleum products and electricity.
In a recent letter to Sec. Alfonso G. Cusi of the DOE, the group first brought attention to the prices of regular diesel. Using data from trading areas of Barangay Fairview, Quezon City, LKI expressed the need to unbundle the retail prices of petroleum products so that consumers may be provided the necessary information regarding the fair pricing of the petroleum products.
In the letter, LKI wrote ?DOE will note that oil companies and the new players have practically uniform prices for diesel. This situation does not appear tenable since oil companies and new players procure their products differently. The oil companies engage in activities such as refining while the new players import finished products.?
LKI President and former Department of Trade and Industry (DTI) undersecretary Atty. Vic Dimagiba said ?We believe that the DOE Secretary is authorized to issue the circular mandating the unbundling of retail prices of petroleum products preferably within the first quarter of the year. Even under full deregulation, the DOE Secretary is authorized to ensure fair pricing of the petroleum products for the benefit and information of the consumers.?
Dimagiba went on to point out Cusi?s ?police powers? by citing sections 7, 11, 12, 13, 14, 15, 18, 19 and Republic Act 8479. LKI firmly believes that requiring the unbundling will ensure a transparent pricing which benefits the consumers.
On power rates, LKI took the position of Filipino consumers, explaining that for transparency and consumer empowerment, ?we believe that the DOE should publish the regular maintenance of the power plants over the next twelve months and inform the consumers of the reasons for any unexpected shutdown, particularly during peak hours.?
Dimagiba observed that ?the April 12 shutdown and yellow alert from 1 to 3 PM spiked the wholesale market from PHP 15.00/kWh to PHP 30.00/kWh during the trading period.? Dimagiba pointed to data from the DOE which showed power plants from Makban unit 5, SL PGC Unit 1, SL PGC Unit 2, San Gabriel, Malaya Unit 2 or a total dependable capacity of 1,080 MW experienced forced outages one after the other during the period.
LKI observed that similar forced outages and shutdowns regularly occur during the summer. The group believes that sharing with the consumers an accurate and on-time detailed information on the reasons for the shutdown can dispel perception of any form of collusion among power plants resulting in spikes in the WESM prices. As a point of reference, LKI highlighted the March and April 2018 data showing electricity rates increasing by 85 centavos and 23 centavos per kWh respectively.
Dimagiba continued by explaining that ?a sign that there will potentially be low reserves is when the Malaya plant is placed back online. If this happens, DOE can instruct the National Grid Corporation of the Philippines (NGCP) to publicize this information so everyone knows there is a potential low reserve.?
LKI recommended to Sec. Cusi that the DOE should also monitor the bid behavior of power plants in WESM during Malaya?s activation , forced outages and shutdown.
In this manner, the group believes consumers will be made aware of the elevated prices in WESM and can thus intelligently comprehend the reasons when power rate hikes are announced.
Dimagiba concluded by stating ?DOE is aware that when Meralco announces power rate hikes, the elevated prices have already persisted for days, impacting on the generation cost for the month, which are charged by the generation companies and passed on to consumers.?
LKI is a new member of Consumers International, a membership organization for consumer groups around the world. Consumer International is composed of over 200 member organizations in more than 100 countries to empower and champion the rights of consumers everywhere. Dimagiba also acts as Chairman of the International Organization for Standardization (ISO) Consumer Policy Committee (COPOLCO) of the Philippines.
For any inquiries or concerns, you may reach LKI President Vic Dimagiba at 0917-812-5546

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