Gov't urged to buy 40% Petron stake to control oil price hikes

MANILA, Philippines - Militant think tank IBON Foundation on Monday urged the government to buy the 40 percent stake of Petron that Saudi Aramco is offering if it is serious in controlling fuel price hikes. In a statement, the foundation said buying the 40 percent share of Petron is part of responsible state intervention in the oil sector. "The necessity for state control is highlighted if we compare the Philippine experience with that of Thailand, another major oil importer in the region. The Petroleum Authority of Thailand (PTT) and Bangchak are public oil firms with significant influence on local oil prices. While the prices of Thai gasoline, diesel and LPG have tripled since 1996, this is still much less than the five-fold increases in the Philippines in the same period following the oil industry deregulation," IBON said in a statement. Also, it said acquiring majority control of Petron would allow government to increase its leverage in the market. IBON said that at the minimum, government can control 51 percent of the oil firm with more solid control if it has 70 percent to 80 percent of it. IBON also said retaking Petron must be done “in the context of promoting state control in the oil industry.” IBON also stressed the need to reverse oil deregulation to control the rapid increases of oil prices. "Many Filipinos, battered by skyrocketing oil prices, favor the return of government regulation of the local oil industry and the repeal of the Oil Deregulation Act (RA 8479), according to the latest IBON nationwide survey," it said. On the other hand, it said removing the reformed value-added tax (RVAT) on oil products, which has worsened the problem of high oil prices, is the single most effective measure that will give the quickest relief from rising oil prices to the greatest number of Filipinos. The reversal of oil industry deregulation can then be done progressively and effectively with a more socially responsible government, it said. "Oil prices will remain excessively high and rising as long as the industry is deregulated and remains under the monopoly of foreign transnational corporations. The oil industry sector is too critical to the country's strategic interests to be left in the hands of private profit-seeking interests," it added. - GMANews.TV