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Bacolod City, Philippines Thursday, August 15, 2013
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Smuggling linked to
fuel price discrepancy

BY CARLA GOMEZ

Stiff competition, higher consumption, the presence of an economic zone and smuggling were  the reasons given by representatives of oil firms yesterday  why the price of fuel in Cebu City has plummeted, and is about P8 per liter  cheaper than in Bacolod City.

The fuel firm representatives appeared before the Negros Occidental Sangguniang Panlalawigan led by Vice Governor Eugenio Jose Lacson at a hearing conducted by the SP Committee on Energy at the Capitol in Bacolod City, on complaints that gas prices in Negros Occidental are much higher than in Metro Manila and Cebu.

While some fuel smuggling was insinuated to also be happening in Bacolod City, the oil firm representatives said they could not assure that prices of fuel could be brought down in Negros Occidental.

They told the SP they would convey the clamor of Negrenses for lower rates to their head offices.

Department of Energy figures as of July 31 showed prices of premium gasoline in Cebu City ranged from P50.92 to P53.53, Iloilo City - P57.95, Bacolod City - P60.89 to P62.09, Dumaguete City - P52, Tagbilaran - P58.90, Tacloban - P55.77 to P57.77, Roxas - P60.61, and Ormoc - P61.65.

P10 MORE IN NEG. OCC.

Fuel prices in Metro Manila have also been noted to be about P10 lower than in Negros Occidental.

The vice governor said one idea discussed at the hearing as an immediate solution is the lowering of the Value Added Tax on fuel, that in the past, had already been brought up in Congress.

“I guess our financial managers should study this,” he said.

He also noted that Rep. Alfredo Abelardo Benitez (Neg. Occ., 3rd District) is already bringing the issue out in the open with the push for the creation of an oil price watchdog for the Visayas, which is a positive development.

“But more importantly, it is very clear that there are price disparities, and we should go beyond monitoring, and now find solutions to bring down the price disparity between Metro Manila and the Visayas,” Lacson said.

John Sales of SEAOIL Philippines said Cebu should not be made a reference for how prices should be in the rest of the Visayas because there are many factors to consider.

‘SMUGGLING LOWERS PRICES IN CEBU’

The ongoing price war in Cebu is no longer healthy, SEAOIL has stopped its expansion there, he said.

The presence of an economic zone and suspected fuel smuggling were also driving prices down in Cebu, he said.

Asked if fuel smuggling is also happening in Bacolod, Sales said he has heard that sometimes, there are offers of fuel at lower prices in Bacolod, which is an indication that it could be smuggled.

Ambrose Demaisip, district manager for Shell in the Visayas Region, said the reason why Cebu’s fuel prices are lower is that competition is stiff there, and the volume of its fuel consumption is double that of Negros Occidental.

The volume of consumption in Cebu is 36 million liters a month compared to Negros Occidental with 15 million liters, he added.

Shell has a price management unit in Manila that sets the suggested retail prices of its fuel, Demaisip said.

SHELL AWARE OF COMPLAINTS

The Shell management in Manila is aware of the complaints of Negrenses on the price discrepancies, he said.

Asked if Shell could bring down its prices in Negros, Demaisip said “We cannot make a commitment, but there is a possibility. We will refer the concerns (of the Negrenses) to our higher-ups in our corporate affairs and pricing departments.”

Teddy Macainan, president of the Alliance of Concerned Transport in Occidental Negros, said they were not satisfied with the explanations of the oil firm representatives.

It is clear that there are people controlling fuel prices in Negros Occidental, particularly in Bacolod, he said.

Macainan said they are asking the SP to push for a reduction of the VAT on fuel from 12 percent to 7 percent, which is the only immediate solution.

Elizabeth Katalbas, president of the Federation of Bacolod City Drivers Associations, said her group has a pending petition before the Bacolod Regional Trial Court Branch 54 against the Oil Deregulation Law.

Board Member Renato Gustilo, chairman of the SP Committee on Energy, said that after they get a transcript of the hearing yesterday, they will discuss the course of action the SP will take.

FILE CHARGES, BIZMAN URGES

Board Member Renato Malabor, who authored the resolution requesting the representatives of oil companies to enlighten the SP on the disparities in fuel prices in Negros Occidental, and in other provinces, said that, based on what was divulged at the hearing, the SP will see what action it can take to further press for lower fuel prices.

Businessman Ed Alunan said he is urging the provincial government to file cases for economic plunder against the oil cartel, instead of going through hearings.

Hearings have been held for two years now and nothing happened, he said.*CPG

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