PRESS RELEASE- September 21, 2018
Laban Konsyumer Inc. (LKI) calls on DOE once again to unbundle base prices of fuel products, laments cold treatment of proposal
Recently, in a letter dated September 14, 2018 to Alfonso G. Cusi, Secretary of the Department of Energy (DOE), Laban Konsyumer Inc., thru Atty. Victorio Mario A. Dimagiba, wrote and followed up on their continuing call for the DOE and the group?s proposed Draft Circular providing guidelines for the monitoring of prices on the sale of petroleum products by the downstream oil industry in the Philippines. Dimagiba expressed disappointment by the DOE?s cold treatment on his and his group?s clamor for a transparent unbundling of base prices of fuel products. LKI continued its call for this unbundling scheme in order to assure more transparency and access to information for the public and for consumers.
In the letter, LKI stated that ?recently and based on news reports, the Department of Energy (DOE) had issued various circulars on the renewable energy standards both for on grid and off grid customers to enhance the use of renewable energy, guidelines on bill deposits of distribution utilities and electric cooperatives for transparency and good governance, as well as the use of the Euro 2 vice Euro 4 fuel as a measure to temper inflation in the prices of petroleum products. Likewise a draft circular had been posted for comments proposing amendments to the EPIRA law as well as for self-generators.?
But, Dimagiba complained in comparison, ?on the other hand, the Department had turned cold on an equally very important guidelines ensuring the right to know of consumers despite the public announcement of DOE that the above subject draft circular shall be issued at the end of the 1st quarter, moved to the end of the 2nd quarter and had remained a draft as of date.? Dimagiba went on to express his disappointment at the failure of the DOE to act on this circular and on the desired unbundling of fuel prices.
Using previous past commitments as prime examples of DOE?s inaction, he pointed out that ?on January 19, 2018, Undersecretary Donato D. Marcos wrote the Chairman, Committee on Energy, House of Representatives and indicated a timeline of March 2018 for finalization and approval by the Secretary of the draft circular.?
On April 16, 2018, the Laban Konsyumer Inc. appealed to the Secretary to issue the circular and thus enable consumers to enjoy their right to information and access to fair and reasonable pricing of petroleum products.
The LKI then cited provisions of Republic Act 8479, sections 7, 11, 12, 13, 14, 15, 18 and 19 that clothed the Secretary adequate police powers over the industry. Said letter was acknowledged by Atty . Rino E. Abad, Director-in- Charge, Oil Industry Management Bureau and stated that the said DC is to be finalized and issued soon after the consultation. Based on past news reports, there were focus group discussions held by the DOE with stakeholders on the draft circular.
On June 12, 2018, the LKI submitted an Affidavit on Retail Prices of Fuel Products to the Philippine Competition Commission (PCC) and the Office for Competition of the Department of Energy (OFC DOJ) and requested to be informed whether the market behavior and retail prices of fuel products are in order and in compliance with law. The PCC in their letter of July 3, 2018 duly noted the information and may help the PCC in the conduct of its assessment and monitoring of the retail fuel industry. However, the PCC did not consider the affidavit for purposes of conducting a preliminary inquiry until such time that we comply with the applicable PCC Rules of Procedure.
Dimagiba said ?a copy of the draft DC had five (5) Articles on General Provisions, Adjustments due to international price movement, biofuel cost and capital /operational cost recovery, forms and contents of price adjustment notice, unbundling of base price and final provisions providing penalties.?
He went on to discuss that ?the unbundled base price shall contain product cost, refining cost, import terminal/depot operation cost, transshipment cost , taxes, biofuels cost, haulers fee, unbundled other fixed cost, unbundled variable cost and oil company/bulk suppliers profit.?
LKI believes that ?the DC shall answer issues such as the big discounts that retail outlets offer to the customers, the identical retail prices of service stations in a specific trading area and the reasonableness and fair pricing of the MOPS formula that allows the identical weekly adjustments in prices of the oil industry using the difference of the current week from the previous week prices.?
As proof of LKI?s validity in their request, Dimagiba used the latest data and figures to back up the claims of his group. He pointed out that ?the data below supports the importance of the unbundling of the base prices of the fuel products.?
Jan 3, 2018 Sept 6, 2018
Gasoline P41-P52 /L P52-P63/L
Diesel P28-P36/L P42-P53/L
Kerosene P33-P39/L P46-P58/L
In closing, Dimagiba highlighted and once again appealed to the DOE to proceed with the posting of the draft circular for comments by the stakeholders and thereafter issue the DC. As his last statement, Dimagiba declared that ?the universal right to know of Filipino consumers on reasonable and fair pricing of petroleum products deserve a priority action from the Department of Energy.?
Laban Konsyumer Inc. (LKI) is a nonprofit and non-stock registered entity with the Securities and Exchange Commission. LKI is a consumer advocacy group in the Philippines that promotes consumer education and protection against deceptive, unfair and unconscionable business practices. The LKI focuses on education, prices and supply of basic and prime commodities, standards and qualities among other areas of consumer protection.
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 and visit our website www.labankonsyumer.com
September 15, 2018
Mr. Alfonso G. Cusi
Secretary, Department of Energy
alfonso.cusi@ doe.gov.ph
Subject: Draft Circular providing guidelines for the monitoring of prices on the sale of petroleum products by the downstream oil industry in the Philppines
Dear Secretary Cusi ,
Recently and based on news reports, the Department of Energy (DOE) had issued various circulars on the renewable energy standards both for on grid and off grid customers to enhance the use of renewable energy, guidelines on bill deposits of distribution utilities and electric cooperatives for transparency and good governance, as well as the use of the Euro 2 vice Euro 4 fuel as a measure to temper inflation in the prices of petroleum products. Likewise a draft circular had been posted for comments proposing amendments to the EPIRA law as well as for self-generators.
On the other hand , the Department had turned ?cold ? on an equally very important guidelines ensuring the right to know of consumers despite the public announcement of DOE that the above subject draft circular shall be issued at the end of the 1st quarter , moved to the end of the 2nd quarter and had remained a draft as of date .
Sir, on January 19, 2018, your Undersecretary Donato D. Marcos wrote the Chairman , Committee on Energy , House of Representatives and indicated a timeline of March 2018 for finalization and approval by the Secretary of the draft circular.
On April 16, 2018, the Laban Konsyumer Inc. appealed to the Secretary to issue the circular and thus enable consumers enjoy their right to information and access to fair and reasonable pricing of petroleum products. The LKI cited provisions of Republic Act 8479, sections 7, 11, 12, 13, 14, 15, 18 and 19 that clothed the Secretary adequate police powers over the industry. Said letter was acknowleged by your Atty . Rino E. Abad, Director-in- Charge, Oil Industry Management Bureau and stated that the said DC is to be finalized and issued soon after the consultation. Based on past news reports, there were focus group discussions held by the DOE with stakeholders on the draft circular.
On June 12, 2018, the LKI submitted an Affidavit on Retail Prices of Fuel Products to the Philippine Competition Commission (PCC) and the Office for Competition of the Department of Energy (OFC DOJ) and requested to be informed whether the market behavior and retail prices of fuel produts are in order and in compliance with law. The PCC in their letter of July 3, 2018 duly noted the information and may help the PCC in the conduct of its assessment and monitoring of the retail fuel industry. However, the PCC did not consider the affidavit for purposes of conducting a preliminary inquiry until such time that we comply with the applicable PCC Rules of Procedure.
A copy of the draft DC had five (5) Articles on General Provisions, Adjustments due to international price movement, biofuel cost and capital /operational cost recovery, forms and contents of price adjustment notice, unbundling of base price and final provisions providing penalties.
The unbundled base price shall contain product cost, refining cost, import terminal/depot operation cost , transshipment cost , taxes, biofuels cost, haulers fee, unbundled other fixed cost, unbundled variable cost and oil company/bulk suppliers profit .
In the LKI opinion, the DC shall answer issues such as the big discounts that retail outlets offer to the customers, the identical retail prices of service stations in a specific trading area and the reasonableness and fair pricing of the MOPS formula that allows the identical weekly adjustments in prices of the oil industry using the difference of the current week from the previous week prices.
The data below supports the importance of the unbundling of the base prices of the fuel products.
Jan 3, 2018 Sept 6, 2018
Gasoline P41-P52 /L P52-P63/L
Diesel P28-P36/L P42-P53/L
Kerosene P33-P39/L P46-P58/L
We therefore appeal again to the DOE to proceed with the posting of the draft circular for comments by the stakeholders and therafter issue the DC. The universal right to know of Filipino consumers on reasonable and fair pricing of petroleum products deserve a priority action from the Department of Energy. Thank you.
Very truly yours,
Atty. Victorio Mario A. Dimagiba, AB, LLB, LLM
President
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