Gov’t intervention emboldens Left to seek oil industry nationalization

By Aytch de la Cruz and Charlie Manalo

11/08/2009

As Malacanang stood its ground in the face of a legal challenge posed by foreign oil companies, local militants yesterday urged the Arroyo government to expand its market-interventionist policy by nationalizing the oil industry.

“The best way to fortify the people’s position against oil monopoly and other forms of predatory pricing and corporate exploitation is to push the takeover and nationalization of oil industry...The State takeover of oil companies and the nationalization of the oil industry is the best safeguard for public interest. If Malacanang really wants to serve public interest, it should rush Congress to repeal the Oil Deregulation Law that empowers the oil cartel to treat this country like their one of their oil republics,” Fernando Hicap, chairman of the Leftist Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya), said in a statement.

In pushing the oil industry’s nationalization,

Pamalakaya belittled the impact of EO 839, which ordered oil companies to roll back the prices of their petroleum products to October 15 levels. “It confirms that EO 839 has only minimal impact and merely a paper tiger that can be challenged in all venues by the powerful the oil cartel and their apologists in big business,” it said.

As expected, EO 839 – which virtually directed oil firms to operate at a loss – did not sit well not only with oil companies but also with the entire Philippine business community, who denounced the executive fiat as a form of market intervention by a president who prided herself as an economist.

The oil companies and other business groups lobbied hard against EO 839. Recently, Pilipinas Shell Petroleum Corp., the local subsidiary of multinational Royal Dutch Shell, elevated the oil price cap issue to the Supreme Court saying, among others, that Mrs. Arroyo’s order did not stipulate the conditions for determining “exceptional circumstances to warrant the exercise of emergency powers.”

In EO 839, Mrs. Arroyo pointed to the recent calamities that devastated the economic life in Metro Manila and suburbs and in Northern Luzon to justify her order for oil price rollback. Malacanang claimed that Mrs. Arroyo had given much thought to protect the interest of people adversely affected by typhoons when she signed EO 839.

Despite Malacanang’s explanation, Pilipinas Shell went on to question EO 839’s legality before the High Tribunal.

Yesterday, Press Secretary Cerge Remonde said over radio that the Palace would not get in the way of the oil firms seeking redress “for imagined grievances,” but he also stressed that “it is also the right of the people to complain against what they feel as opportunistic tendencies of these giant companies as it is the responsibility of the government to protect the interest of the greater number.”

Executive Secretary Eduardo Ermita also maintained that EO 839 was legal as it was based on certain provisions set under the Oil Deregulation Law.

Remonde even waxed emotional in his apparent populist bid and said: “These oil companies should just listen to the sentiments of our people.”

Remonde also called the attention of the Department of Trade and Industry (DTI) headed by Sec. Peter Favila to immediately look into the reported price increase of liquefied petroleum gas (LPG) tanks in Visayas and Mindanao which was uncalled-for according to the Palace.

“I hope they (oil firms) would understand. The government is not out to drive them to bankruptcy. We are just asking them to please understand the situation of our country and our people…that is why we keep appealing to them to stop making grim warnings because it does not help everyone at all,” Remonde said, reiterating his earlier stance on the raging oil price issue.

But the militants were uncomfortable with Malacanang’s plea for understanding. They insisted on the takeover of Pilipinas Shell, Chevron and Petron which, they said, would take less than 24 hours “by mere declaration” of President Arroyo.

Pamalakaya also supported the national boycott campaign being called by Bagong Alyansang Makabayan to punish the oil cartel. “The boycott of the three oil firms becomes necessary at this stage to weaken their political position brought about by their control of the 80 percent of oil supply and distribution all over the country. The campaign for boycott of Shell, Chevron and Petron will make a difference in favor the exploited public,” it said.

Pamalakaya also sought an immediate full-blown inventory of petroleum stocks of oil companies after a Pilipinas Shell executive predicted an oil shortage as a result of Eo 839.

As this developed, small oil industry players bared plans to immediately hike by as much as P5 per liter the prices of their products should Malacanang lift EO 839.

The planned price hike was a way to get back some of their losses resulting from EO 839, according to Eastern Petroleum president Fernando Martinez.

Martinez said that a post-EO 839 price increase would surely happen, but it would be carried out “in transience” so that consumers would not feel the pinch of a big hike.

Flying V Chairman Chito Villavicencio said he was looking at the possibility of imposing “staggered” increases of smaller increments after the prevailing price freeze is revoked. “I think it (hike) should be divided into three weeks, like P1.50 per week,” Villavicencio said.

The Consumer and Oil Price Watch (COPW) seconded the small players’ claim that they’d been operating at a loss as a result of the controversial EO. With a report from Pat Santos

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