MANILA, Philippines—The Department of Energy is constituting a team that will scrutinize the financial statements of six oil companies belonging to the Philippine Institute of Petroleum (PIP) that want to clear their names of allegations of overpricing and collusion.
Energy Secretary Jose Rene D. Almendras said the department has sent the PIP a letter containing the names of the people DOE proposes to constitute the third-party audit group.
“I’ve given my suggestion on who are the members of that committee. I nominated an economist, a business representative, a consumer representative, a transport group leader and the dean of the UP School of Economics,” Almendras said.
“I also recommended one (journalist each) from print and TV as representatives. We sent a letter and we’ll give you a copy of the letter and we hope they will accept it,” he added.
According to Almendras, PIP preferred that the DOE be the body to suggest the members of the audit group to prevent any more allegations of bias toward the oil companies, namely Chevron (Philippines) Inc., Liquigaz Philippines Corp., Petron Corp., PTT Philippines Corp., Pilipinas Shell Petroleum Corp., and Total (Philippines) Corp.
Last month, the PIP announced that its member companies were ready to open their books to the public, in the hope that the examination will validate previous findings that supposedly disproved allegations of overpricing and collusion among the oil companies.
Roberto S. Kanapi, vice president for corporate communications at Pilipinas Shell, earlier said that the additional review will put to rest the fears of the public that oil companies are taking advantage of the volatility of the global oil market through unwarranted increases in local pump prices.
It is also hoped that with this audit, people will have a better understanding of the downstream oil industry, he added.
The proposed third-party audit will add to the two audits that were conducted in 2005 and 2008, both of which cleared the oil companies of charges of overpricing and collusion.
The oil companies say local pump prices move according to price fluctuations in the global oil market and the reason the oil companies end up with almost the same prices is the result of “market forces at play.”
PIP warned, however, that any additional audit have well-defined objectives, taking into consideration the views and opinions of various sectors with emphasis in promoting the interests of both the consumers and the oil industry.
PIP, a non-stock, non-profit grouping of businesses operating in the downstream oil industry in the Philippines, has long been an advocate of reform and the setting up of standards in the oil industry that will help ensure a level playing field.