A DAY after the Joint Foreign Chambers (JFC) weighed in on the oil-price-freeze issue and sought a clear end date for the controversial Palace order, Malacañang said on Tuesday it will set the validity period of Executive 839 once such is recommended by the Joint Department of Energy-Department of Justice (DOE-DOJ) Task Force monitoring the impact of the directive keeping prices at October 15 levels.

Palace officials also said President Arroyo, again upon the recommendation of the joint task force, may lift the temporary freeze on oil prices even if Luzon remains in a state of calamity.

This time around, however, it’s the lawmakers who want the Palace to set tough terms for the oil companies before yielding to the requests of big business groups and the counsel of some state economists, to use the price-cap tool sparingly.

The experts’ concern had zeroed in on possible supply disruptions when businessmen decline to sell at a loss; and possibly deepening the inequities between consumers in Luzon on one hand, and Visayas and Mindanao on the other.

Congress was urged to frontload legislating repealing the oil-price deregulation law, and Sen. Francis Escudero said the Executive should not yield to pressure because it’s the government’s job to look after the people’s welfare in times of calamity.

House Speaker Prospero Nograles said, meanwhile, that he will agree to the temporary lifting of Executive Order (EO) 839 that placed petroleum products under price control, provided oil companies agree to full disclosure of their stock inventories and importation records that will justify any price adjustment as soon as the EO is lifted.

Palace reacts to JFC

Deputy Presidential Spokespersons Lorelei Fajardo and Gary Olivar made the statements in response to the appeal of the JFC and other business groups in the country to set the end date for EO 839, citing the uncertainty generated by the measure’s “open-ended nature.”

“Oil is an important product and we understand the plight of the oil companies who follow the global market prices. That is one possible consideration...It may warrant the review [of EO 839],” Fajardo said.

She said the DOE-DOJ task force is expected to submit its recommendation and evaluation report  at the “soonest possible time but they could not give the exact date because  there is an ongoing consultation dialogue and their evaluation.”

Olivar said that EO 839, which based an oil-price freeze in Luzon on the existing state of calamity in the area following typhoons Ondoy and Pepeng, may be lifted even if Luzon remains in a state of calamity.

“The EO is justified by the state of calamity but may be lifted on a time schedule independent of that state of calamity,” he said.

Fajardo stressed the government is trying to balance the interests of the public and the business community.

Olivar said businessmen have the right to “make their case as loudly and as repeatedly as they want to, but groups opposed to EO 839 should not insist on glossing over the fact that: number one, the President is legally authorized to do what she did; and number two, the President has to take action on the larger interest of the greater majority of our people.”

The people and also the foreign chambers understand that “the President has to be the President of all people, not just of the foreign chambers or the oil companies who are expected to be good corporate citizens,” he said.

Oil-deregulation law repeal in focus

Congress is being asked to frontload passage of remedial legislation repealing the oil-deregulation law when regular sessions resume next week amid predictions of skyrocketing oil prices following the expected recovery of the global economy.

This developed as Senator Francis Escudero said Malacañang should resist pressure from business blocs and other interest groups to lift EO 839.

In seeking to swiftly amend or repeal the oil-deregulation law, Escudero argued that when Congress passed it in 1998, the expectation was oil prices would decline because of competition among the oil companies.

“The [oil deregulation] law has become an artifact. We have to act quickly before the forecasts of oil- prices soaring, once again, above the $100 level become a reality when the global economy recovers from today’s crisis,” he said.

In a statement, Escudero explained that the current turbulence in the global economy has seen governments taking on an even more “activist, regulatory roles.”

“We can do no less. I call on my colleagues in Congress to speedily act on proposals that aim to review the oil deregulation law,” Escudero added.

He aired the appeal in the wake of demands by foreign and local business groups moving to revoke EO 839.

Malacañang had issued the order in a bid to avert a surge in consumer prices following the devastation wrought by typhoons on Metro Manila and the rest of Luzon in the past month. Oil prices have also risen due to the improving global economic situation.

According to Escudero, the country’s poor and dwindling middle class bear the burden most and they constitute a far greater portion of the population. “Why can’t these oil companies wait until our people have recovered from these disasters? This is, after all, a remedial and temporary action by government.”

Escudero insisted that the oil-price freeze is “the least that government can do for the people to alleviate their suffering.”

He recalled that crude oil cost only $10 per barrel in January 1999. “Before the credit crisis struck the US last year, there were projections that fuel prices could even shoot past the $100 level because of increased demand amid the dwindling supply of oil worldwide.”

While the country has reduced its dependence on imported oil from 92 percent in 1973 to less than half today, the senator noted that the poor is hardest hit by any increase in fuel prices.

To effectively address the problem, Escudero prodded Congress to act immediately on proposed amendments that will plug loopholes in, if not repeal, the oil-deregulation law.

Balance of interests

For his part, Nograles said that while he recognize the need to balance public welfare and healthy business environment, the state must also assert its will to protect its citizens from abusive business practices, including cartelization and price manipulation in the oil industry.

“The debate on whether or not our oil companies, particularly the so-called Big 3, should now be resolved. The only way we can have the most accurate conclusion is for the oil firms to open their books and show the public that all the negative things attributed to them are just misperceptions. I understand that business is for profit, but raking in unreasonable profits at the expense of public interest and when the public is left with no or little choice is absolutely unconscionable,” he said.

Nograles is in Washington leading a House contingent that will meet with US Congress counterparts to discuss possible areas of legislative cooperation on issues affecting both the US and the Philippines, such as the economy, peace and order, and human rights.

In seeking an end date for EO 839, the JFC had claimed it will adversely affect 80 percent of the country’s oil supply and create a black market because importers will not sell at a loss.

Nograles said the JFC’s position may be valid but oil companies must prove through full disclosure of their books that all their price adjustments have been reasonable and have not been bleeding the public through price manipulation or cartelization.

“The JFC’s position can be valid but there is still a raging debate on the business practices of these oil companies. There is also a discrepancy in pricing if we compare the Big 3 with the small oil players. How come the small players, which also import oil just like the Big 3, can afford to sell their products at cheaper prices? All these things should be adequately explained so that any price adjustment after the EO is lifted will not generate public uproar,” he said.