Opinion: A Brief Relief

The oil price freeze of the GMA Administration via EO 839 gave some relief to the transport sector and car owners devastated by typhoons and floods particularly in Luzon.

With a strong clamor from the business sector including her economic adviser from Albay for its termination, that initiative ended just like that a brief relief from the continuing increase of oil prices. That EO could have defined the truth behind oil pricing in the country which seems to be operating as a cartel.

The period under price cap could have been used to really determine the true components and costs within the pump price of oil and attain transparency in pricing. While the price of crude oil in the world market is dictated by market conditions and the unnumbered law of supply and demand (Could we hope the soon-to-be Congressman Pacman would initiate an amendment to this law?), the pump price of gasoline can be made more transparent.

The costs that the government may have a say on the operations of these oil companies include foreign currency exchange costs, refining and distribution costs, marketing costs, taxes and duties and profit margin. Unfortunately, nothing was done so we’re back to zero, with the transport sector rallying at the corporate offices of these big oil companies and threatening nationwide transport strikes. Obviously, the oil price cap is anti-market and not good for the economy in the long run, but doing something within the period of oil price cap is the best for the transport sector and motorists, but not necessary to those at the Department of Energy.

Source: Bird's Eye View - Catanduanes Tribune - 06 December 2009