Oil companies told: Don’t exploit Saudi attacks to hike prices | Inquirer Business

Oil companies told: Don’t exploit Saudi attacks to hike prices

/ 05:36 AM September 19, 2019

MANILA, Philippines — Albay Rep. Joey Salceda called on oil companies not to exploit last weekend’s attacks on Saudi Arabian oil fields to unduly raise pump prices, as he noted that some of them were already trying to price up old inventories as if these were new supplies.

Speaking to reporters at Malacañang on Wednesday, Salceda said the earlier warnings issued by government officials about a looming price increase were premature and that oil companies must justify any raise they now plan to impose.


“I think they have to prove the public that they bought oil at those prices,” he said. “They are taking advantage of this predisposition toward panic.”

As to proposals to suspend the fuel excise tax, Salceda said the Tax Reform for Acceleration and Inclusion (TRAIN) Act was clear that this could only be done if the average price of Dubai crude would reach $80 per barrel for three months.


Knee-jerk reaction

“So if there’s one thing this administration will not be known for, it’s knee-jerk reflex reactions,” he said.

Meanwhile, Finance Undersecretary Karl Chua cited reports that the oil supply had returned to normal following the drone attacks on the Saudi oil fields.

“So if that is the case, then there would be no impact on our oil supply and there’s no further action  needed. So we just have to monitor that the supply that are coming from the Middle East are indeed adequate,” he said.

Saudi Arabia is the top supplier of crude oil in the Philippines.

For TRAIN law repeal

At the House, the opposition Bayan Muna party list group called for the repeal of the TRAIN law in view of price hikes that may stem from the attacks.


“Some sectors are saying that there would be around P3 per liter increase on oil prices because of the attacks and the resulting drop in oil supply would also push the prices of other goods to skyrocket,” the group’s chair, former Rep. Neri Colmenares, said in a statement. “So it is imperative that the TRAIN law is now repealed.”

Colmenares noted that under the law, which took effect in 2018 and which critics blamed for the soaring inflation rate that year, excise on diesel and crude went up to P4.50 this year and would rise further to P6 in 2020.

The excise on gasoline also increased to P7 in 2018, P9 this year, and would go up to P10 next year, he added.

Proposed amendment

The TRAIN law allows the increase in the excise on fuel to be suspended when the global price of oil averages at least $80 per barrel for three consecutive months. But critics argued that the threshold was set too high, resulting in policymakers being unable to suspend last year’s oil price hikes as inflation soared.

Bayan Muna Rep. Carlos Isagani Zarate urged House colleagues to pass the Makabayan bloc’s House Bill No. 243 to amend the TRAIN law.

“We hope that the House leadership would prioritize this bill,” he said. “We are also calling on the Supreme Court to decide on our petition to junk the TRAIN law so as to shield consumers from another wave of price shocks.”

The bill would reverse what it considered to be the TRAIN law’s “regressive and antipoor” sections, especially the additional excise on petroleum products. —Reports from Leila B. Salaverria and DJ Yap

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TAGS: Fuel Prices, Joey Salceda, Oil companies, Saudi attacks
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