Oil firms questioned for ‘unusual’ price cuts
The Department of Energy (DOE) has asked oil players in Mindanao to explain the unusually huge reduction in their gasoline prices, warning this may eventually qualify them for “anticompetitive behavior.”
The DOE was referring to the move by some oil companies in Mindanao to slash gasoline prices by a huge P3 a liter for the period covering Aug. 30 to Sept. 6. This was based on monitoring by the DOE’s field office in Mindanao.
“While price rollbacks like this are a welcome development for the consumers, the DOE cautioned that sudden and sustained huge decreases in oil prices might qualify as ‘anticompetitive behavior’ under the Oil Deregulation Law. This market behavior puts both smaller oil players and consumers at a disadvantageous position in the long run,” the DOE said.
It said smaller oil firms could end up losing their market shares and subsequently fold up. “[Thus] remaining oil players may have the chance to dictate prices to the detriment of the consuming public.”
The DOE is planning to reconvene the DOE-Department of Justice (DOJ) Task Force to look into possible violations of the law.
It also assured consumers it would remain vigilant in ensuring the protection of their welfare.
According to the DOE, the huge price cut also brought to light related concerns in the downstream oil industry in Mindanao. These included the reported peddling of petroleum products using “bote-bote” (bottled oil products) and the alleged smuggling from nearby countries.
The DOE assured that its Mindanao field office has started coordinating with the local government units (LGUs) concerned and the Bureau of Fire to eliminate the “bote-bote” scheme and discourage consumers from patronizing such activity as this may endanger public safety and health.
The DOE added it was also in talks with the Bureau of Customs, stressing that smuggling would hurt not only the oil industry players, but also the economies of LGUs in Mindanao due to lost revenues.
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