DOE, DOJ recommend scrapping of oil price freeze

(Update 12:12 a.m.) Amid reports of dwindling oil stock, the Justice and Energy departments have recommended the scrapping of the controversial order that froze prices of petroleum products at their October 15 levels in typhoon-hit Luzon.

With the agencies' move favoring the interest of oil firms, the decision to lift the implementation of Executive Order 839 is now in the hands of President Gloria Macapagal Arroyo.

"That EO is temporary in nature. It's not expected to remain for long and as you can see the weather has improved for several days already," said acting Justice Secretary Agnes Devanadera in a local television interview.

Press Secretary Cerge Remonde told GMANews.TV on Thursday that Mrs. Arroyo would "still have to study the recommendation" and might likely act on it after next week's Asia Pacific Economic Cooperation summit.

"We will not allow anybody to pressure us," Remonde added.

Sought for a comment, Petron Corp. said the company would wait until the order was made official before issuing any statements. Shell and Caltex, meanwhile, have yet to reply.

Trade Secretary Peter Favila acknowledged that prices of basic commodities might shoot up once the EO is lifted because the price controls would be removed with it. He, nonetheless, warned entrepreneurs of appropriate sanctions in case they take advantage of the situation.

"I would not hesitate to reimpose the price control if I see there is profiteering or any forms of taking advantage," Favila said in a separate local television interview.

Included in the DOJ-DOE task force's recommendation is the adoption of the oil firms' proposal to provide fuel price discounts until November 30 to areas still reeling from the effects of successive tropical cyclones that hit the country last month.

Among the areas are the provinces of Benguet and Pangasinan, Baguio City and the eastern portion of Laguna province.

Radio dzBB’s Teresa Tavares said the calamity-stricken areas would be given a discount of P2 per liter on diesel products and P1.25 per liter on gasoline products.

DOJ and DOE’s recommendation came two days after Energy Secretary Angelo Reyes said that the country’s oil inventory might only last for two weeks.

Various sectors, including farmers, vegetable traders, and tricycle drivers, are claiming that they are suffering from the scarcity of oil supply in Luzon.

Vegetable traders expressed fears over revenue loss because they claim that they could no longer transport their products to Metro Manila due to the shortage of fuel stock.

But critics of the country's biggest oil companies – Petron Corporation, Pilipinas Shell, and Chevron- claimed that the reported shortage was only "artificial" and that the shut down of selective service stations was a form of protest by the petroleum firms.

Vice President Noli de Castro likewise called on the government to be cautious in lifting the freeze order, saying it could be subject to abuse.

Using the law of supply and demand, De Castro, explained that traders could impose higher prices on certain commodities while the demand for them is still high. - GMANews.TV