Oil companies gave government a threat—repeal Executive Order freezing oil prices in its October 15 prices or face the risk of oil rationing. Some companies, small players, even said that they will shut their operations down because of this executive order.
I challenge these oil players, namely, Caltex, Petron and Shell, as well as minor players: Total, SeaOil and others—PLEASE MAKE GOOD YOUR THREAT AND SHUT YOUR OPERATIONS DOWN.
The same goes to the LPG dealers who continually sabotage and terrorize us with their threats of an LPG shortage—DO WHAT YOU WANT.
I am solidly behind President Gloria Macapagal-Arroyo efforts to finally, finally make these oil players respect us, especially our laws and our People. I take my hat off to Mrs. Arroyo who ordered the Justice secretary Agnes Devenadera to take the lead in this one and file criminal cases against these oil players.
Arroyo has the power to executive such an order since the State of National calamity has not been lifted. If Mrs. Arroyo makes good her threat of completely taking over the operations of these oil firms, that is constitutional. And the People will not oppose her. In fact, the Filipino People will even salute her and admire her for showing political grit amidst tremendous lobbying efforts by these oil giants.
I ask and urge government to take over these oil firms if they refuse to abide by the E.O. and jail these erring economic saboteurs masquerading as oil executives. If they ration oil, government has the right to seize these companies, file economic saboteur charges against them, jail their executives and take over operations. That would be the day.
Mrs. Arroyo has the full support of the people. Time for government to show its muscle against abusive and unscrupulous private entreprises.
Popularity: 1% [?]
sure why not… the government can take over any private entities. when laws are violated, businesses may pay fine, serve time in jail or close the business.
GMA can fix prices??? Then why just now???!!
She should have done it as early July 2008, when
http://archives.manilatimes.net/national/2008/july/05/yehey/images/front.pdf
She changed her mind again. BongV, o’, nagsinungaling na naman.
Bert:
Malas mo na lang, di mo nakita she was doing that as VP pa lang.
Di mo nakita, nor did you exert any effort to read the headlines – Day 1 VP Says She is nor running for President; Day 5 – VP declares she is running for president.
Doon pa lang, dapat scratch na sa selection , kaso, ayaw makinig, ayaw paawat – binoto pa talaga as president – e di magdusa kayo. you and arroyo deserve each other.
hehehehehe
Long overdue!!! Di dapat pinasa yung batas na yun…Dapat lang na government controlled ang oil for third world countries like RP…
That would be the day, indeed. And then we will see whether our President GMA is a Hugo Chavez, or an Alberto Fujimori. ahahayheheh.
So free markets do not exist in the Philippines? A private company is ordered to set prices or be taken over? The companies say the price fix causes them to lose money. They are required to lose money and support the Philippine economy so the corrupt can get rich?
Who do I trust more, Petron or Ms. Arroyo?
Sorry, I am on the side of Corporate Philippines, and the oil companies.
Joe
Joe,
The price fixing has a legal leg to stand on at the moment. Don’t worry about choosing between Arroyo and Big Business. As Obama famously said, it’s a “false choice.”
apanfilo,
Between Arroyo and Big Business, if push comes to shove, who do you think will blink first?
Apanfilo,
Three quickies: (1) Obama was making a different point. (2) You consign “Big” to “Business” as if being big is itself a problem. (3) Sometimes laws are wrong, or applied in a way that is damaging.
To be truthful, I don’t know the history of Shell, Petron, and Chevron in the Philippines. I don’t know if they have plundered the people as Pacific Long Distance Telephone Company, owner of Smart does, or if they have been responsible suppliers of a highly valuable commodity. I know the logistics of getting gas to all the islands is a nightmare, and expensive, and oil is in scarce supply worldwide. I don’t know how laws can mandate that more of it be made available, or that it be made available at less than cost. Laws can’t make companies operate . . .
I believe there is a risk that government intervention will continue to cast the Philippines as a bad place for responsible corporations to operate, as they are not free to set prices that make sense to the commitment they make to shareholders.
Furthermore, the Philippine economy is certainly the real root of the problem; jeepney drivers are not allowed to raise prices, so they are angry each time they pull to the gas pump. Their fares are fixed because there are so many poor people relying on them. Because government is self-serving and failing to perform.
It seems to me the Philippine problem is not too much “Big” business, but not enough. And the root of the problem is government performance, not Shell.
Scapegoats are easily made, I fear.
Joe
Joe:
I see Shell USA adjust their prices at the pump regularly, based on the global price of oil.
Thus, prices can go up as today’s regular price of (87 Octane, 10% ethanol) fuel is $2.75 per gallon. And, the price also goes down to $2.25/gallon for the same fuel grade.
Shell Philippines, however, is another story. Once it goes up – it always stays up – even if the global price of oil has gone down.
When Shell does that, the price of jeepney fares don’t go down, price of commodities don’t go down (due to fixed fuel and transportation costs that ensure a high total landed cost).
There is always a justification why the price can’t go down, but Shell Philippines sure jumps the gun when prices increase.
Bert, Joe,
Who will blink first? C’mon, man, are you easily taken in by such one-time posturings?
Angie Reyes has consistently taken the side of Big Oil in the matter of allegations of price fixing and cartel behavior. That to me is the clearest signal about the administration’s policy (or lack of it) on consumer protection and antitrust regulation.
As to the apparent skirmish between government and Big Oil, call it a welcome diversion in these trying times. Even Dingdong Dantes and Marian Rivera had to be separated first before they can be reunited.
BongV says in USA, gas prices at the pump goes down when crude price goes down, and up when crude price goes up.
Makes sense. If Patricio feels poorer now because he is paying more for gasoline than last month or last year or 5 years ago, then end-of-story.
————
Or you can look at this:
http://www.alternat1ve.com/biofuel/2008/05/15/average-philippine-gasoline-prices-2007-2008/
And check your record-books and see if they match what some dude has said to be gasoline price at Shell Pasong Tamo:
2009-06-03 36.20
2009-06-24 39.20
2009-07-07 38.47
2009-07-23 36.97
2009-08-18 39.69
2009-09-01 39.19
2009-09-15 37.94
2009-10-05 36.44
2009-10-20 37.94
And as you are trying to recall things, don’t forget to remember your dad’s birthday. And your mom’s.
And don’t forget what happened on February 27, 2004.
Manila Bay.
free markets can create middle income earners . In our country, there must be a stronger rule of law- the point of the blog.
The oil market is controled by Oil Speculators. They buy the productions of oil companies , months ahead. Then, resell them at
high prices. Oil speculators were on boom in their business during
the term of Pres. George W. Bush. Mr. Bush himself an Oil man. He was
in the oil business for a long time. So, prices of oil will remain
fluctuating. No matter what you do.
if oil prices fluctuate, then GMA is correct to say that prices should not be raised. Duuuhhhh!!!!
But why is she bothering with this? Is she planning to run for re-election or something?
Now what Petron and affected companies should do is follow the spirit of Noynoy’s “10Percenter-thing”. Since profits are headed down, then the energy companies should quickly lower the wages of their employees by ten percent if not more.
A few Pinoys-in-Pinas will not care whose carcass the pound of flesh is carved out from, as long as it is not theirs.
Action should follow words. Another play acting?
Hey Dollar Joe,l there has been rumblings amongst the oil producing countries that using the WTI (West Texas Intermediate spot price for crude oil is dangerous for their economic health..
So finally in the past few days the Saudi Arabia government announced that they would no longer use the the WTI spot price as their benchmark for pricing oil.
Proving for one and all the the pricing mechanism for crude oil is not simply determined by the physical supply and demand for crude oil and incomplete information about future supplies.
Similarly the price mechanism for the forex rate in the Philippines is set daily by the last transaction of the day on the trading “floor” of the (cartelized) Bankers Association of the Philippines. It is a cartel that fixes prices.
If a major oil supplier is no longer set to use the WTI as their benchmark where does that leave our efficiency experts that insist we use market mechanisms for determining the price of oil?
How much of the contracts being traded on the commodity markets are for physical user and how much for financial speculation?
Joey Salceda is an expert financial analyst for the financial market economy but not for the real or main street economy. Ignorance plays a big part in price mechanism for oil in the Philippines. GMA knows this and naturally is playing savior knowing that a Php 2-3 difference in the price of gasoline will not break the oil companies. Tapos lumalabas na ang mga dogmatic free traders.
Philippine government regulation only applies up to our national boundaries. You cannot audit the integrated international oil companies.
The only solution is for government to get involved in the market itself. Not the physical markets itself but a combination of the physical trading and casino trading of oil.
I personally know for a fact that some years ago oil suppliers bought oil from for delivery starting 2010 at the $50 dollar range. If only we had a transparent and open system for people to learn what the call and put options for oil are for the periods going forward and the different benchmarks for pricing then people would get educated.
It is similar to forecasting typhoons before they hit.
The balance of easy to get to oil is now mostly under the control of sovereign states. Most of the rest of the oil on the planet is the hard to get to and hard to refine type. The price is now reflective of a major change.
That would affect the production of food all around the globe. For that matter everything else.
in this country stupid is remains to be the rule because the experts are all stupid does.
up n grad,
whether or not she’s running for re-election is irrelevant. what she is doing is the right thing. the president, under the Constitution, has the responsibility of taking care of public welfare. if the public welfare is being hurt or damaged by any entity, public or private, the president may exercise her emergency powers. under an emergency situation such as ours, it is pretty legal for her to take over these oil firms and let learned men run it.
Now that you mention it, I agree with you. And she might
as well order the prices frozen as a Christmas gift to all
of Pilipinas. And to keep it frozen in January since people
are broke after the holidays. And guess what people will
want for Valentine’s Day?
Why not???? I mean, what is she in power for?
So the government seize control of the oil companies. Where does she think she’s getting the money to subsidize the prize of oil products?
Taxes? Again?
should be price, not prize. What’s wrong with me and my spelling since yesterday.
i don’t think she needs the tax to subsidize the price, because we all know that those company has a lot of stock even if the price in the world market rise, they only tell us that they have no stock so they could raise profit. if this is not true then what is the purpose of those depot in pandacan and other location.
Pinoys in Pinas in July 2008 were willing to pay the following prices.
–P58.10 to P60.07 per liter for unleaded gasoline;
–P55.10 to P58.30 per liter for kerosene;
–P51.00 to P52.97 for diesel.
The prices eventually went down, but GMA should have kept the prices-at-the-pump at those levels. The “extra”, she should have set aside to lend to small- and medium-business enterprises for corner sarisari stores, tricycle operators and even for high-end restaurants like LeCirque.
Patricio,
It’s silly to get into a pissing contest with the oil companies over matters the government does not control.
First, the government sold its shares in Petron. If it did not then Petron could have unilaterally lowered its prices and passed on the losses to the government.
Second, the government deregulated the oil industry. It gave free rein to the “market” to determine the selling pice of oil and it didn’t keep an eye on cartelized prices.
But even if it wanted to prevent cartels it cannot because the government does not know how the oil companies compute their prices.
The government has no way of telling whether oil companies are overpricing or cartelizing because it doesn’t even have a formula for pricing. So what, other than populist politics, is the basis for Gloria’s executive order?
The oil companies will not shut down because they don’t like Gloria’s executive order. They will shut down if Gloria’s executive order forces them to sell their products at a loss and they are unable to sustain those losses. They’re businessmen not politicians.
Ask or force the oil companies to reveal their price formula first and then decide whether or not an executive order fixing prices is in order. Otherwise the country will suffer, sacrificed on the altar of Gloria’s misguided populism.
Manuel,
A hepothetical scenario. Gloria, in her misplaced populist politics as you said, and in desperately wanting to gain approval rating from the people, tightens the screws, forcing the oil companies to sell at a loss, and the oil companies shut down.
Do you think she will reap the fruits of her populist politics? Will her approval rating from the people improve?
The Law of Supply and Demand does not adhere to the Law of
Future Commodities Prices. If I buy a barrel of oil for $60 today.
Then, resell it for $80 the next three months. Me, controlling the production of oil. By buying the whole three months’ production of
oil. Can any Presidential Executive Order from any country force me
to sell it for $60?
I think the President and Energy Secretary, are ignorant on the way
the World Oil Market works. It is a world of Oil Price Speculators;
Future Commodities Traders. Greedy and people without any concience. Like the Gordon Geckos of Wall Street in New York.
You can have your oil companies, oil tankers, refineries,
money, etc…but if I am a greedy Oil Speculator who had
controlled the productions, by buying future commodities prices. You have to buy on the prices I want per barrel.
I hope I have clarified everybody’s mind!
Hyden: Speculators on oil futures do NOT control production. And the only speculator you seem to know are those who believe that prices only go up.
Now here is food for thought. Speculators have to close their positions before it is too late. Hold a contract too long and a speculator has to take possession of what he has a contract on. Now think of how many Olympic-size swimming pools is needed to receive a baby tanker of sweet crude. There is downward pressure on these things, one would think.
UP n grad
You have spot pricing, forwardsd and futures trading and option trading. Options sometimes do not obligate an actual excgange. Hence the word options.
Apart from that you have long term contrats signed between producers and refiners.
Depending on the jurisdication then you have refineriy CAPACITIES THAT ALSO PRODUCE THE DIFFERENT TYPE OF OIL PRODUCTS.
Not a simple process of detrmining refined oil products.
J_aG: So many different ways to enter transactions, so many opportunities to make money!!!! Or lose.
Remember that the Oil Cartels can limit daily production of barrels of oil. To drive up prices. If Saudi Arabia limits its production for 100,000 barrels per day. Then, If I am an Oil Speculator (Wholesaler). Will buy for the one month Saudi’s production. The oil market will be in my hands for the next month. Buyers will have to pay for what I put as the price per barrel.
Let us point our fingers to the entire problem of CORRUPTION IN GOVERNMENT.
This state intervention in the business affairs of the private sector is uncalled for.
From what I know, the so-called BIG OIL COMPANIES are not really that big in terms of profit. Truth is, they thrive on “marginal profits” each and every time.
Not too many people know that there are gas stations that close shop because their business cease to be available all because the Philippine government has “intervened” TOO MUCH.
Gabo tong gobyerno natin – kawawa ang mga negosyante. I should know, I used to handle business taxation in the city government.
Oil companies are sometimes the Oil speculators (Wholesalers). The
Energy business is so complicated now. That countries go even to
invade other countries for oil. Saddam Hussein tried to grab the
Oil fields of Iran; during the Iraq – Iran War. The U.S. invasion
of Iraq was for its oil; under the pretense of promoting Democracy.
New York Wall Street Traders are still busy making billions of dollars out of the energy situation of the world. We, the oil consumers are like dogs. Being fed on piece meal to peace meal basis. We are supplied with oil, just to keep us barely alive. If these Sharks will find out. We have recovered. They will take again their bites. Oil Prices will go up again!
Hyden,
Usually you are correct, so I merely read and move on, in basic agreement. But I disagree with your claim that the US invaded Iraq for Iraq’s oil. My guess is the US invaded Iraq to re-make the Middle East strategically to install a pro-US democracy, thereby stabilizing the Middle East and ensuring a stable supply of oil from the region. In other words, the invasion was not tactical (Iraq’s oil), but strategic (stability in a region that has known precious little . . . ever).
I also think consumers are trained to be like dogs, to consumer, to drive their cars everywhere with a single driver, to be wasteful. The dog needs to teach itself new tricks and new technologies (how to make fuel out of water, for instance).
Joe
Joe: the biggest “consumerism trick” taught to Pinoys in Pinas is to be oblivious to the seriousness of this statistic — that currently one in three Pinoys in Pinas survive on less than fifty-pesos a day.
It is a consumerism predicament — it is easier to get energized [the educational system trains folks on] thinking of how to earn enough for a 3- or 5-day vacation in Palawan or Bangkok than thinking of how to help the many Pinoys that survive on less than a dollar a day.
Even the religious institutions are “ignoring” the abject-poverty problem while they focus on the “more important” problem of helping folks get religion to save their souls.
The other “mass-psychology” trick is to pin-the-blame-on-the-donkey.
UP n,
Yes, I write that the Philippine economy is “thin”, but you are more to the point. I think the attitude of sweeping poverty under the rug is horrible, and it is why there is no long-lasting outcry about deaths from upside down ferries or typhoons or mud slides or anything. Most of the dead are poor who have no voice. They can’t sue anybody because they can’t pay the required court fees, and not too many attorneys here are willing to work for P 25 a day.
I wish I were younger and an attorney. I’d be the most litigious bastard the Philippines has ever seen. I think there is money to be made by holding government and companies and the courts responsible for irresponsibility.
Joe
Joe:
Many have taken that route -they either died young,got “assimilated”, or migrated overseas – with lead between the eyes.
Unless of course, you take the Miriam Santiago attitude and be darn good friends with Smith, Wesson, and Gluck. And have a retinue of well-trained armed bodyguards.
Coneleeza Rice was an Stockholder of Mobile Oil. Dick Cheney was
majority owner of Haliburton Corporation. The company that supplies the Iraq war effort. George Bush was a former Oil man. His career was
financed by Oil Barons. I dont think it is strategic for the U.S. It is strategic for them. And for their stocks to go up…U.S. version
of: What are we in power for? Got a hint from Filipino Politicians
maybe!
And by the way, Hydrogen Fueled Cars were invented in the middle
of the 18th century. But, the invention was set aside for the
Gasoline Internal Combustion Engine. The Oil Lobby in the U.S.
Congress won. Ever read the Teapot Scandal in the U.S. Congress?
The patent for Hydrogen Car is still in the Archives. Car companies
are dragging their feets. It is because they dont want to invest in
RETOOLING. Henry Ford’s Model T Car run on electric; not on gasoline.
Hyden,
Okay, we disagree about the US motives for going into Iraq. No biggie. We agree, I am sure, that it was a really stinko decision, and we can also probably agree that Dick Cheney is the dark force behind most of the ill-will policies of George Bush (Iraq, Guantanamo, torture, spying on citizens, politicizing the Attorney General’s office, etc.)
But I do fear that you have gone off the deep end regarding hydrogen propulsion. Anyone who would could produce a car that was practical and cost-efficient would put it on the market and make a killing, profitwise. Now the car companies are hammering away (investing) in batteries that won’t hold a charge, smushed corn in the gas tank, and all kinds of tricks to try to get off of oil. They can’t. They are pissing money away . . .
Do you believe the UFO stories people report on, too, and JFK’s assassination?
Like cold fusion, there is a big gap between theory and getting something that works on the street . . . and I’m quite confident it is not lack of investment money . . .
Joe
I do believe that there are hydrogen cars but even then, companies that make automobiles will be reluctant to change from oil to water.
http://www.theautochannel.com/news/2008/10/08/158982.html
For one thing, it will totally render oil producing countries nearly useless. Just imagine the impact, oil will be nothing more than it’s putrid sticky polluting self. Of course, factors that stopped hydrogen powered cars ranged from politicians, merchants and cartels and countries of oil producing whose inhabitants are likely to hunt you down at the whiff of oil independence.
In fact, there are other ways of powering up your car. There are already electric cars available however the same thing happened, unseen forces are strangling grants, researches and experiments from fully. Other links of obvious attempts to stifle the alternative powered cars
http://www.treehugger.com/files/2009/05/obama-hydrogen-cars.php
http://www.huffingtonpost.com/steve-parker/obama—mpg-up-vehicle-hy_b_206064.html
Simplified, no more demand for oil, countries go bankrupt and they will kill you before you do it.