The Department of Energy is planning to use the study being conducted by the Independent Oil Price Review Committee (IOPRC) as guide in drafting possible amendments to the Oil Deregulation Law.
At the sidelines of the second IOPRC consultation meeting on Monday, Zenaida Y. Monsada of the DOE’s Oil Industry Management Bureau expressed confidence that the study would be able to determine the profitability levels and fair prices in the local downstream oil industry.
Monsada added that, depending on the outcome of the study, the seven-man team comprising the IOPRC could also recommend changes in the pricing methodology being employed by local oil firms to allow more transparency in the system.
In a separate briefing, economist and former Budget Secretary Benjamin E. Diokno said that the team would employ more statistical techniques to ensure that the study would be more extensive than the others made in the past. The previous studies cleared the oil companies of allegations of overpricing and collusion.
“Our study will be evidence-based. Our conclusions will be based on hard data,” said Diokno, who heads the IOPRC.
He added that the study, which would zero in on pricing and profitability, should be completed by the first week of July.
But Diokno clarified that the team was not tasked to press charges should any oil company be found violating the Oil Deregulation Law. That task, he said, would fall under the jurisdiction of the joint Department of Justice-DOE Task Force.
The creation of the IOPRC stemmed from a call made by the six oil companies belonging to the Philippine Institute of Petroleum (PIP) in October last year.
The six-month review entailed close scrutiny of financial statements of the oil companies, in their bid to clear their names of allegations of overpricing and collusion. Members of the PIP, whose books are being reviewed, include Chevron (Philippines) Inc., Liquigaz Philippines Corp., Petron Corp., PTT Philippines Corp., Pilipinas Shell Petroleum Corp., and Total (Philippines) Corp.
All the data and evaluations to be gathered will be submitted to the legislature, laying the groundwork for the “enhancement of present structures” or, simply put, for any possible proposed revisions to the Oil Deregulation Law.
Several groups have already asked Congress to repeal the Oil Deregulation Law, saying it only caused unabated increases in fuel prices over the past 14 years.
The Oil Deregulation Law was enacted in February 1998 with the promise of promoting competitive oil prices to benefit consumers.