“The Aquino government is merely deceiving the people,” San Mateo told Bulatlat.com, adding that “by the time the government is done distributing the so-called fuel cards to public utility drivers nationwide, its one-month effectivity may already be up, or other rounds of oil price increases have started eating into the supposed subsidies.

KMU Chairman Elmer Labog: “What the Filipino workers and people really need and ask for are big-time rollbacks of oil prices, an end to the P7.50 per liter overpricing, the scrapping of the E-VAT on petroleum products and the repeal of the Oil Deregulation Law,”(Photo by Marya Salamat / bulatlat.com)

Elmer ‘Bong’ Labog, chairman of KMU, described as mere “additional mollification” the transport officials’ claims that the targeted subsidies may help them rid the streets of colorum drivers. “These drivers are working as ‘colorum’ (illegally plying some routes) because of the worsening problem of unemployment. They would just strive to continue working and coughing out bribes for the government transport personnel,” Labog said.

George San Mateo likewise scoffed at the suggestion that the “crumbs” being offered a small section of the oil consumers “for only a limited time and involving a small fraction of the expected VAT windfall,” would help resolve the drivers’ persistent colorum problem.

Consumer Relief Ignored

Protesters led by Piston and KMU dared the Department of Energy (DoE) to serve Filipino consumers by shielding them against the oil companies’ alleged overpricing, but in response the DoE only rose to the defense of oil companies, saying in a statement released yesterday that there is no fuel overpricing and that the government has been transparent in providing information on pump-price computations.

In past attempts to investigate oil companies, it had been revealed that the government did not have access to most oil companies’ books, raising doubts as to whether the DoE can accurately gauge whether oil companies were overpricing or not.

The group Bagong Alyansang Makabayan (BAYAN or New Patriotic Alliance) blamed the Aquino administration for its continuing support to the 13-year old Oil Deregulation Law, which, they said, has only given oil firms “more opportunities to oppress and exploit the people”. Bayan has earlier also accused oil firms of overpricing their products by as much as P7.50 ($0.17) per liter. They based their estimates on the monthly movement in Dubai crude prices and the foreign exchange rate since 2008 to the present and the actual price adjustments implemented by oil companies during the same period.

The biggest oil companies in the Philippines such as Petron, Shell and Chevron are subsidiaries of top global oil companies, which are top-ranking global corporations in terms of profits, sales and revenues. In the Philippines, these oil companies have continuously registered profits, too. Yet, these reported profits are still mere indications of their actual profits because as subsidiaries, these companies have notoriously been known to engage in transfer-pricing, or the act of inflating the cost of materials, being sourced from their mother companies, at each stage of production of petroleum products. By the time the materials for finished oil products reach Philippine shores, researchers said, oil companies have already inflated its prices, making it look as if local oil subsidiaries have to shell out for higher costs of production, thus trimming their profits.

Even with transfer pricing and supposed higher-priced raw materials, the local profits of Petron, the biggest among the three oil giant companies in the country, increased 84-percent in 2010. Meanwhile, Pilipinas Shell’s profit reached P6.36 billion ($146 million) for the whole year of 2010, said Edil Gonzaga, secretary-general of Transmission-Piston. He noted that “Shell’s increase in profit is 54 percent higher than its income in 2007.” Its parent global company’s profits, meanwhile, reportedly rose 61-percent in 2010.

Protesters and consumer advocates have given the Philippine government varied proposals to address the surging oil prices and protect the consumers against oil overpricing. Among others, these so far include imposing a price freeze, scrapping the EVAT on oil, putting a cap on EVAT on oil depending on oil prices, suspending the EVAT on oil, scrapping the oil deregulation law or limiting the oil companies’ freedom to engage in transfer pricing through government-led centralized crude oil importation or setting up a clearing house.

But the Aquino government has been “deaf, blind, inured” to the peoples’ pleas and suggestions, said Charice Bañez of the League of Filipino Students while addressing the protesters at the Mendiola Bridge.

Aquino Govt Loathe to Lose EVAT Windfall

Earlier the Aquino government said it could not scrap the EVAT on oil for fear of losing the P5-billion ($115 million) it stands to raise from it. Yet, it seemed less anxious of losing expected government revenues to “payoffs of political debts,” said Labog of KMU. He was referring to the Aquino government’s recent decision to condone more than P5-billion ($115 million) in real estate taxes by the Aboitiz group, which bought the Napocor’s Pagbilao power plant.

As the Department of Finance reports an estimated EVAT windfall from the surging oil prices, the Aquino government “hastily signed an executive order” granting some P600-million ($13.8 million) worth of short-term, limited subsidies to public transport “in a bid to appease the people’s anger,” said Labog.

The EVAT on oil is estimated to reach P4.4-billion ($101 million) in the first quarter of 2011 alone, as Finance undersecretary Gil Beltran told reporters this week. “It does not seem right,” said Renato Reyes of Bayan, “that the government is reaping a windfall at the expense of the Filipino people’s suffering.”

 Save as PDF