EXPLAINER: Is there an oil cartel in the Philippines?

A widening gap between fuel price projections by the Department of Energy (DOE) and actual pump price movements over the past five weeks has fueled speculation about a possible “oil cartel” in the Philippines.

A GMA News Feed explainer defines a cartel—based on the Philippine Competition Commission (PCC)—as a group of competing firms that agree to fix prices or control production in a specific industry.

Such arrangements are considered anti-competitive and are prohibited under Philippine law.

Republic Act No. 10667, or the Philippine Competition Act, bans price-fixing, supply manipulation, and other forms of collusion that distort market competition. Section 11, or the Anti-Trust Safeguards, explicitly outlaws cartels and monopolies.

Under the law, cartelization refers to any agreement or coordinated action among refiners, importers, or dealers to fix prices, limit output, or divide markets by product or area—practices that restrain trade and free competition.

Still, some point to the Oil Deregulation Law as a factor behind high fuel prices.

The law removed the government’s authority to set fuel prices, allowing oil companies to adopt their own pricing mechanisms, including the “replacement cost” scheme.

Under this system, firms base pump prices on the average cost of fuel from the previous week, treating it as the cost of replenishing inventory.

Critics, including some lawmakers, argue that this method disadvantages consumers—especially when fuel bought at lower prices is later sold at higher prevailing market rates.

However, the replacement cost scheme is not illegal under the deregulated regime.

Despite this, Department of Economy, Planning and Development Secretary Arsenio Balisacan has said the industry should still be examined for possible collusion.

For its part, the DOE said it has not detected overpricing.

“We have confirmed this when PNOC started buying, and the cost of goods is consistent with what PNOC (Philippine National Oil Company) is paying,” Energy Secretary Sharon Garin said.—Ted Cordero/MCG, GMA News