House leader seeks probe over possible collusion among oil firms on fuel prices

House Ways and Means panel chair Miro Quimbo on Thursday called on the Energy Regulatory Commission (ERC) and the Philippine Competition Commission (PCC) to probe "possible collusion" of oil companies when it comes to weekly fuel price adjustments.

The Marikina 2nd District Representative made the appeal after Secretary Arsenio Balisacan of the Department of Economy, Planning and Development (DepDev) told the first hearing of the Legislative Energy Action and Development (LEAD) Joint Committee on Wednesday that regulators should exercise their powers to ensure that oil firms are playing fair.

“I think the issue is that the oil regulators are not exercising their powers to make sure that market players are being fair in the way they play their game in the market. In Economics 101, Mr. Chair, when there are very few players in the markets, and you ask these players, government may be asking them to cooperate, to coordinate, they are actually asking a cartel,” Balisacan said.

Quimbo backed Balisacan, saying that stronger enforcement by the PCC and the ERC is in order particularly amid the ongoing oil crisis driven by the escalating tension in the Middle East.

“In reality, [government] has sufficient powers in so far as the ERC, in so far as the PCC is concerned, to be able to prevent, determine, investigate, and penalize individuals who are excessively profiteering or dominating their position,” Quimbo said.

“Their mandates carry a very potential impact in lowering the price because you are able to prevent a collusion among these players,” Quimbo added.

The LEAD Joint Committee, composed of 13 House Committees, is conducting the hearing to come up with measures that will address the surging oil prices amid the armed conflict between the US-Israel and Iran.

This has since resulted in massive destruction in Middle East countries where the Philippines sources 30% of its crude oil supply.

Fuel prices have already breached P100 per liter for the last two weeks, burdening sectors across the board but especially the public transport sector.

VAT reduction

During the same hearing, Batangas Rep. Leandro Leviste pushed for the reduction of the Value Added Tax (VAT) from 12% to 10% to aid Filipinos amid the surging oil prices, saying such measure will be beneficial across the board.

“We have a national energy emergency. If the government can cut back on expenses with energy saving measures, then passing my proposed House Bill 4302 should likewise be done for the benefit of our people,” Leviste said.

“It has been 37 days since this crisis started and yet most of those in the transportation sector are yet to receive their cash aid and are paying 12% VAT every day. All the more that the government should reduce the 12% VAT to 10% because this crisis affects all sectors,” Leviste added.

Leviste then asked Quimbo if it is possible for Congress to pass a measure reducing the VAT to 10% or the old rate, to which Quimbo replied, "As Chair of the committee, it is always our anticipation to make the lives of our countrymen easier and better. More progressive the tax is the better without becoming fiscally irresponsible." —VAL, GMA News