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WITH the
nine-year high inflation rate, independent think tank
Ibon Foundation further urged the government to consider
restoring oil-industry regulation to ease the pressure
on high oil prices.
In a
statement, Ibon added that the announcement by local oil
companies that they need to increase oil prices by as
much as P10 to P11 per liter further highlights the
urgency of reinstating a regulated oil industry.
“Deregulation has not affected the domination of the
three major oil companies [Shell, Petron and Chevron] of
the local petroleum market. Instead, it has merely given
the oil giants more room to manipulate pump prices since
their transactions with their parent companies abroad
have become even less transparent, with price
adjustments no longer subject to public hearings,” Ibon
said in a statement.
“The
unregulated environment gives oil firms greater freedom
to overprice and engage in transfer pricing,” the think
tank added.
Ibon
also pointed out that the recent P1.50 hike in pump
prices implemented at the end of May was the largest
hike since October 2001, when average retail prices only
went up by P1.20 per liter.
In
addition, Ibon said oil companies are even threatening
to implement weekly hikes of P2 per liter in an effort
to speed up the recovery of their costs.
Data
from the Department of Energy show that Shell, Petron
and Chevron still control the bulk of the downstream oil
market, as the 60 new entrants that have entered the
sector since 1998 accounted for an average of only 12
percent of the total market share as of 2005.
The
think tank added that high world oil prices remain a
result of the dominance of a few giant oil transnational
companies—such as Royal Dutch Shell Plc., Chevron
Texaco, Total and Exxon Mobile—over the global oil
industry.
“Oil
prices are pushed up further by unhindered speculation
in global oil-futures markets. The monopoly of the oil
giants over the downstream and upstream levels of the
industry makes them immune to the effects of supply and
demand and allows them to dictate the prices at which
they sell their products, independent of changes in
crude-oil production,” Ibon said.
Earlier,
the National Economic and Development Authority (Neda)
warned that the unabated increase in oil prices, a
weaker peso and a host of other factors will push up
inflation and cut the country’s economic growth.
In a
simulation provided by the Neda, a $200-per-barrel oil
price will push up full-year inflation to 9.3 percent
and even cut growth to 5.3 percent this year. The
revised inflation forecast for this year is 5.5 percent
to 6.5 percent, while the growth forecast is 5.7 percent
to 6.5 percent.
Neda
Acting Director General Augusto Santos also said that
while the Bureau of Agriculture Statistics (BAS), in its
latest report, said commercial rice prices are already
stabilizing at the P32-to P40-per-kilo level, oil prices
are still on the rise.
Oil
prices coupled by a weaker peso,
Santos
said, would pose greater threats to increasing inflation
and cut economic growth this year.
The
simulation also showed that the $125-per-barrel oil
price, which is already near full-year inflation, may
increase to 8.6 percent and cut the country’s full-year
economic growth to 5.61 percent. |
