CABINET officials, not President Gloria Arroyo, will sit down with oil industry executives who have published an appeal for a meeting with her to explain their opposition to a government-imposed price cap on petroleum products.
Deputy presidential spokesman Lorelei Fajardo said the task force, led by Energy Secretary Angelo Reyes and Justice Secretary Agnes Devanadera, would meet with various industry players, including dealers of liquefied petroleum gas, to discuss their appeal for the immediate lifting of a cap that has kept fuel prices at their Oct. 15 levels.
In a paid advertisement published yesterday, the oil companies said Executive Order 839, which established a price cap in the wake of two disastrous storms, “carries disastrous short- and long-term risks for the whole country.”
“The imminent danger to the economy, business, and employment from freezing fuel prices far outweighs the intended benefits. A weakened oil sector, forced to sell at a loss, cannot continue to play its strategic role as the government’s partner in the nation’s growth and in ensuring an adequate supply given the instability of world prices of crude oil and petroleum products.’’
“We humbly request that you allow us to discuss these matters with you and to explain our side and how we can better assist those who are really in need of support without damaging the economy and driving away investors.”
The ad was signed by representatives from Chemrez Technologies, Eastern Petroleum Corp., Flying V, Liquigas Philippines Corp., Pilipinas Shell, PTT Philippines Corp., Seaoil Philippines, Total Corp., and USA88.
One major oil firm, Petron Corp., did not sign the petition.
A source from the joint task force said a new order might be issued next week following a series of consultations with industry stakeholders.
“It will not really be a lifting but more of tweaking the original order,’’ said the source, who described the initial proposal for the new order as reflecting a ‘‘consensus’’ among members of the task force and oil players.
Devanadera said the price cap would likely be lifted in some areas that were no longer considered under a state of calamity.
“We are conducting a review and evaluation of the... situation in the calamity-stricken areas... to find out whether or not there is still a need to maintain the oil price freeze,’’ she said.
“We have to determine whether the emergency situation is still present or has worsened.’’
Flying V, one of the companies that signed the petition, was confident that the price cap would be lifted soon.
Flying V chairman Ramon Villavicencio said once controls were lifted, diesel and gasoline prices were likely to go up by P4.50 a liter, but added that his company would be willing to stagger the increase over three weeks.
In Asian trading, oil prices dipped below $80 a barrel as the US dollar strengthened.
Benchmark crude for December delivery was down 60 cents to $79.80 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
On Wednesday, Mrs. Arroyo’s economic adviser, Albay Gov. Jose Salceda, recommended the lifting of the price freeze on oil and petroleum products, saying the ceiling only benefited the rich while the government lost P4.5 billion in potential tax revenue.
Salceda said the tax losses because of the fuel price ceiling, both from the 12-percent value-added tax and the 30-percent income tax on oil companies, could easily reach P4.5 billion.
“This [revenue loss] would be borne essentially by poor households by way of lower cash flows that could have been earmarked for conditional cash transfers, health programs and scholarships,’’ he said. With Rey E. Requejo and Alena Mae S. Flores
