Mang Arnel, 37 and a father of four, has been a jeepney driver for over a decade now. When the Land Transportation Franchise and Regulatory Board (LTFRB) granted a two-peso jeepney fare hike two months ago, Mang Arnel was among the jovial thousands of drivers who thought the increase would somehow compensate for the hard times. But international crude prices rallied recently at $70 per barrel, sending local pump prizes to all-time record highs.
“Akala ko mas giginhawa ang buhay ng mga anak ko, di pa pala,” he could only complain.
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When Republic Act No. 8180 (Downstream Oil Deregulation Act of 1996) took effect in 1998, it promised oil price stability within six months. Under a deregulated oil industry, oil companies may adjust pump prices anytime to recover the cost of refining, or importing oil products, without any government intervention.
“We can expect prices to change from time to time, but such movement is projected to be minimal,” energy officials assured the public then.
The law gave the oil industry full control of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, and marketing, crude oil, gasoline, diesel, LPG, kerosene, and other petroleum products. It was supposed to prohibit cartels and predatory pricing, as well as facilitate healthy competition.
Six years later, 362 players like Total, Flying V, Seaoil and Unioil have gained a significant market share from 4.3 per cent in 1998 to 13.5 per cent in 2004. Although statistics show a growing market for new oil players, the three giant oil companies still determine the fate of crude prices.
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One need not to be a rocket scientist to realize that RA 8180 didn’t serve its true purpose. By simply looking at the plight of Mang Arnel and several others, it is clear that the premature deregulation of the oil industry failed in stabilizing oil prices. Since oil deregulation began, crude oil prices went nowhere but up despite the promises of “oil price stability” and “minimal price hike.”
The government should not have relieved itself of the burden of governance in the first place. A government is supposed to protect the welfare of the people, of the majority, not the interest of a voracious few.
If in case the oil industry returns to regulation, the government should make sure that oil prices are strictly controlled and monitored, and that they won’t be easily pressured by oil companies.
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The United Nations in 1994 declared September 16 as the International Day for the Preservation of the Ozone Layer. Member-states, including the Philippines, are encouraged to promote activities aimed at preserving the depleted ozone layer. Thomasians are welcome to join. You may contact Mr. Dan Pasia at 493-7846.
For comments, e-mail author at joevalarosa@yahoo.com
