Oil or nothing

Each time the oil companies lower the pump prices of fuel, everybody else screams that those bandits in the oil business did not cut the price enough.

But of course each group, whether government officials or militant organizations, has different ideas of what should be the “sufficient” price rollback.

The figures vary from P5 per liter to as high as P10 per liter, for example, as compared to the rollback of only P1 or P1.50 per liter effected by those crooks in the oil business.

In effect, our politicos echo the claim of some militant groups: The oil companies are quick to raise the pump prices when world prices of oil go up, but simply drag their feet when oil prices drop.

And so the guys down here in my barangay can only conclude that the oil companies have been pulling a big scam all along.

For one, all of the gas stations—whether they belonged to the big boys (i.e. Petron, Shell, Caltex) or the dozens of other small ones (i.e. Phoenix, Filoil, etc.)—have more or less the same pricing. Thus, based on the assertion of our government officials that the price rollbacks are a mere pittance, those thugs in the oil business are just part of an elaborate big-business conspiracy to fool the public.

There could be no other explanation.

It follows then that the Aquino (Part II) administration only stood by and did nothing as the oil companies ransacked our economy. The Palace boys could only make some lame public statements, basically calling for bigger price rollbacks. It seems to the guys down here that our leader Benigno Simeon (a.k.a. BS) was helpless in stopping a big scam affecting the entire country.

I am ready to give BS more credit this time. In the first place, nobody has ever presented a concrete basis for the bold claims of a P5-P10 per liter price rollback.

One report, supposedly quoting some unnamed “consumers,” nevertheless, claims that the world price of oil has already dropped to below $90 per barrel, from more than $100 early this year.

I could only wonder where on earth that $90-per-barrel figure came from, since the price of “Dubai crude” has been fluctuating—and wildly so—above $100 per barrel from February to September this year.

Mind you, Dubai crude is the benchmark for oil prices in our part of the globe. In fact, the Dubai crude price last month was about 15 percent higher—still—than its level at the start of the year. Where did the price of $90 per barrel come from then?

Actually, there are more than 200 crude oil types in the world market. Each of them is priced based on a few benchmarks—namely, Brent, World Texas Intermediate (WTI) and Dubai.

The WTI has already lost its sparkle as an international benchmark. The trading hub for WTI crude is a city called Cushing (Oklahoma) in the United States. The hub has been having problems the past few years. There has been too much crude oil going into the Cushing refineries, thus overwhelming the refining capacity, therefore somehow depressing WTI prices.

The WTI prices for instance showed an average of $86 per barrel last month. The average for Brent (another benchmark) was $114 per barrel. And consider this: WTI is lower than Brent by $28 per barrel despite WTI crude being better than Brent.

Dubai crude, which is the benchmark in our region, as I said, posted an average price of about $107 per barrel last month. Where did the $90-per-barrel price come from, really?

But Dubai crude is the benchmark only for the raw material oil. In Asia, the basis for prices of finished products—i.e. diesel and gasoline—is the MOPS (or Mean of Platts Singapore). This is an entirely different story.

This country imports at least 40 percent of its supply of fuel (or finished products). The importers use the MOPS to determine their pump prices. Refiners also use the MOPS. No wonder the pricing of all the oil companies (whether refineries or importers) does not vary widely.

Now, I am certain that the Aquino (Part II) administration, through the Department of Energy, is aware of all those things. Look, I got the data from our contacts in the DoE itself.

Why did some Palace boys still mouth the lines of some militant groups on fuel price rollbacks? Somebody perhaps did not do his homework. Or he had another agenda.

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Is it true that the new head of the Bureau of Customs, Rufino Biazon, barely warming his seat in the bureau, already is fond of a certain BoC official, who has reportedly been trying to get on his good side?

The official is said to be a woman, commonly known among the pier crowd as “Tita” or “Auntie.”

Word goes around the pier crowd that “Auntie” already made first base with the close advisers of Biazon. She was known in the BoC as an “operator,” specializing in importation of rice, sugar, oil, luxury cars and fertilizers. It is said that she was aided by a relative in such an … well, “operation.”

Anyway, our info is that “Auntie” already succeeded in getting word to Biazon, through the close advisers, that all the talk about her was rubbish, perpetrated by those she might have offended in doing her job faithfully.

For instance, rumor has it that “Auntie” has a mansion somewhere in Mindanao, supposedly owned by another lawyer, although her relatives live there. And there is talk that she owns a high-end resort in Palawan.

“Auntie” was also said to be a sacred cow during the cute administration of Gloriaetta, after serving in a sensitive position in the commissioner’s office during the time of former President Fidel “Kuya Eddie” Ramos.

Today, she is said to be rather visible in the commissioner’s office.