Lawmaker wants govt to put a cap on LPG prices

MANILA, Philippines - The government should form a regulatory board that would put a cap and monitor the prices of liquefied petroleum gas in the market in order to safeguard consumers’ interests against unscrupulous businessmen who keep on hoarding the cooking fuel. Cebu Rep. Eduardo Gullas is pushing for the inclusion of LPG in the list of “basic necessities" under Republic Act 7581, or “The Price Act of 1992," to safeguard consumers against potential hoarders and profiteers. “We should promptly classify LPG as a basic necessity, to ensure adequate supply of the cooking fuel at all times at fair prices. We are tired and sick of these recurring, mostly artificial LPG shortages, which are obviously being instigated by crooked traders," he said. By implication, the Visayas legislator wants to put LPG in the same category as rice, corn, bread, fresh, dried and canned fish and other food products. These products are all classified as basic necessities and are thus protected against hoarding, profiteering and cartelization. At the same time, Gullas – head of the 12-man House contingent of the Commission on Appointments – suggested that the Consumer and Oil Price Watch for the Department of Trade and Industry, and not the DOE, should regulate the distribution and sale of LPGs. “Over the years, compared to the DOE, the DTI has definitely demonstrated greater capability in building up enforcement of, and compliance with fair trade practices," he pointed out. For several weeks now, consumers have been burdened by a severe shortage of LPG. Under The Price Act, basic necessities are instantly frozen at prevailing prices, or put under automatic price control, whenever a locality is declared a disaster area, under a state of calamity, under an emergency, or under martial law, or declared in state or rebellion/war. Gullas said that under the law, the President also has the option, upon the recommendation of the National Price Coordinating Council, to impose a price ceiling on any basic necessity, under certain conditions. He said government, using a special buffer fund, might also procure, purchase, import or stockpile any basic necessity. "Under the law, the government can actually devise ways of distributing basic necessities, for sale at reasonable prices in areas where there is a supply shortage, or a need to effect changes in prevailing prices," Gullas added. Last week, the president of the dealers association of liquefied petroleum gas in the country hinted that it is the big oil companies that are in cahoots with each other to create an artificial shortage of LPG supply. “I don’t think we can do that (hoarding)," said Arnel Ty, president of the LPG Marketers Association. He didn’t mention any company, however. He told the House committee on energy of Pampanga Rep. Juan Miguel “Mikey" Arroyo that the LPG shortage, which he deemed as artificial due to hoarding of big firms, are affecting the masses in general, particularly the poor households who use it on a daily basis. Ty, who owns a refilling company, said that it would be almost impossible for 138 refillers, 1,200 dealers and 10,000 outlets to unite in creating any shortage of LPG in the market, as what has been experienced early this year. Among the three major players in the LPG market are Petron Corporation, Pilipinas Shell and Total Philippines. Energy Secretary Angelo Reyes, who attended the congressional inquiry, denied that there is any LPG shortage, however. “There’s an adequate supply (of LPG). No shortage, I am confident that it will normalize soon," he said. The Cabinet member deplored though that the deregulated LPG industry has in effect tied the hands of the government in addressing the problem. Representatives from the big oil firms echoed Reyes’ statement. Petron Gasul representative Jayvee Palafox and Shell spokesman Bobby Kanapi told the Arroyo committee there is adequate supply in the market. As far as the Department of Energy is concerned, Reyes observed that the problem lies in the distribution level, especially because unregistered refilling stations are apparently hoarding the LPG supply. “There is problem in the distribution system," Reyes said. He disclosed that illegal LPG refilling stations only refill unbranded cylinders and are leaving branded ones empty, which in effect causes the LPG shortage. But the DOE failed to give a satisfactory explanation to the query of Zambales Rep. Ma. Milagros “Mitos" Magsaysay, who asked him on how the illegal LPG refilling stations affected the supply in the market. Ty, who was accused by the DOE of operating as illegal refiller, countered that all the cases against them were dismissed. He said empty LPG branded cylinders were swapped with unbranded cylinders by consumers looking for cheaper and affordable cooking gas. Bayan Muna Rep. Teddy Casiño had accused DOE officials, led by Reyes, and big oil companies of hiding the supposed LPG shortage to spare them from any accountability and responsibility. “The LPG shortage is a classic case of the government's failure to regulate and intervene in the market due to the regulation policy. The DOE and oil giants are hiding the fact of the shortage to conceal their culpability and instead are training their guns on the small fry retailers and refillers whose role is being bloated out of proportion," said Casiño. At the same time, Ty also revealed that Petron, Shell and Total have started to buy LPG supply from Liquigaz Philippines Corporation since December 2008 or the same supplier where they get their supply for retailers. “Since December when they (Liquigaz) entertained Petron, Shell and Total, customers in their terminals started to pile up," said Ty. Magsaysay agreed with Ty that the entry of three oil players could have contributed to the problem. - GMANews.TV