PRESIDENT Gloria Arroyo has ordered the Energy Department to study the possibility of lifting a price cap on petroleum products after the Joint Foreign Chambers argued that it would lower fuel imports and lead to shortages and a black market.
“Considering that oil is an imported product and that oil companies also depend on prices of the global market, these may warrant a review of the price ceiling,” deputy presidential spokesman Lorelei Fajardo said.
The President froze pump prices at their Oct. 15 levels after back-to-back storms killed nearly 1,000 people and caused billions of pesos in damage.
But the oil companies are opposing the price freeze in effect in the regions worst hit by the storms, which remains in effect until the President lifts the state of calamity over those areas.
On Monday, the Joint Foreign Chambers added its voice to the debate, warning that the price cap would hurt 80 percent of the country’s oil supply because importers would not sell at a loss.
The Management Association of the Philippines also described the price freeze as being “based on an oversimplified but misleading view of the problem.”
The Philippine Chamber of Commerce and Industry has said that price controls should be implemented judiciously and sparingly “and not a day longer.”
Fajardo said that if the oil companies had alternative recommendations on how to help typhoon victims without the need to impose a price ceiling, the government would be willing to listen.
“We need to balance between business interests and the clamor for oil prices to be controlled so that victims of recent calamities can recover faster,’’ she said.
“The government’s primary concern is how to ease the plight of our people.
“I think we should stop focusing on price controls and instead work together on how we could help our people. Maybe, if there are other recommendations or alternative solutions that [oil companies] can also offer to the government, we can consider these. We all have our shared responsibility.”
Malacañang earlier warned the oil firms that cases of economic sabotage would be slapped against those found hoarding fuel while the price caps were in effect.
Press Secretary Cerge Remonde said the government was capable of punishing violators of the fuel price freeze.
“When supplies suddenly disappear in the market, then there must be some form of economic sabotage. And the government will act with the same determination to protect the interest of the greater number of people,” he said.
“We agree with the oil companies and concerned groups that any form of price control is not good for the economy. That is a basic economic tenet of a free market that Mrs. Arroyo adheres to.
“But these oil companies have long-term supply contracts [and do] not [do business] on a month-to-month basis, so they should stop fooling us about warnings of a supply shortage.”
In a statement, House Speaker Prospero Nograles said he supported a temporary lifting of the price cap as long as the oil companies agreed to a full disclosure of their stock inventories and importation records to justify any price adjustments after the ceiling was lifted.
