DOE to Mindanao oil players: explain huge oil price drop

doe-to-mindanao-oil-players-explain-huge-oil-price-drop

The Department of Energy (DOE) has ordered Mindanao oil players to explain the unusual price reduction on gasoline products that may be considered as anti-competitive behavior.

Oil companies had a P3.00 per liter rollback in Mindanao from August 30 to September 6, based on the monitoring of the DOE Mindanao Field Office (MFO). But other oil companies’ gasoline prices rose by P.50 per liter in the same period, reflecting the uptrend in the global market amid positive signals over production freeze in major oil producers.

“This market behavior puts both the smaller oil players and the consumers at a disadvantageous position in the long run. Smaller oil players may actually lose its market share and end up closing, allowing the remaining oil players the chance to dictate prices to the detriment of the consuming public,” the DOE said.

The energy department warned that sudden and sustained huge decreases in oil prices may be qualified as anti – competitive behavior under the Oil Deregulation Law.

Bote bote

The unusual market movement may also trigger more peddling of petroleum products through the “bote-bote” scheme and the alleged smuggling of oil products abroad.

DOE said that they’re working with local government units and the Bureau of Fire to eliminate the bote scheme, and also discouraged consumers from patronizing oil products from the said activity as it may affect public health and safety.

Peddling of liquid fuels is a violation as stated under Department Circular No. DC2003 – 11 – 010 or the Retail Rules.

Oil Smuggling

Meanwhile, DOE is in talks with the Bureau of Customs on the alleged smuggling of oil products “as this may hurt not only the oil industry players but also the economy of LGUs in Mindanao and the rest of the country.”

“Taxes are lost, affecting the delivery of basic services to our people,” it said.

 

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