PH can’t cap pump prices due to deregulation law, DOE says

With pump prices posting a record weekly increase, the Department of Energy (DOE) on Monday said it has no authority to impose a cap due to the Oil Deregulation Law.

According to DOE Secretary Sharon Garin, while the amendment of the Oil Deregulation Law would help moving forward, there are currently no measures that give the department an authority to implement a ceiling on prices.

“We are constrained by the law and the deregulation that we do not have the powers to cap or to control the prices unless maybe they give us the authority or an amendment of the law, or emergency powers. As of now, speaking as DOE, DOE does not have the power to do so,” she said in a virtual briefing.

Retailers are set to implement the biggest pump price hike on record starting Tuesday — gasoline by P7.00 to P13.00 per liter, diesel by P17.50 to P24.25 per liter, and kerosene by P32.00 to P38.50.

This comes as the Strait of Hormuz, a key global shipping corridor located between Iran and Oman, has been closed off amid the ongoing conflict among the United States, Israel, and Iran. It is considered the world’s most vital oil export route, connecting the biggest Gulf oil producers with the Gulf of Oman and the Arabian Sea.

According to Garin, amending the Oil Deregulation Law could benefit in the long term, but there are more pressing matters for the near term.

“I do believe that is a good option for us, a certain degree that DOE would have the mandate to regulate to a certain extent the prices of oil, especially pump prices. That is a welcome change for us in the future. What we are seeking now is the immediate solutions that we can find in the next two, three, or four weeks,” she said.

“The Oil Deregulation doesn’t only speak about prices. There are other things that it regulates, so maybe an amendment to the law, not the entire law. If Congress wishes to do so, that is the legislative action. As an executive, we will only follow what the law says,” she added.

In terms of limiting purchase volumes, Garin said there is currently no need to implement a cap as some retailers have been reported to do so.

“We haven’t issued anything on that yet and I don’t think we are anticipating that. So far, as our computations are, if we do consumer as much as we historically do, there’s no need to cap the consumption,” she said.

“I think practically, a public utility, that would not be allowed… Let me just check on that with my lawyers, but I don’t think you can limit public service,” she added.

At present the Philippines is seeking alternative sources of fuel products even as supplies are still enough to last until the end of April.

“We have more than enough time so there’s no shortage. What will distort the market is if some people, unscrupulous people, would hoard kasi masisira talaga kasi ano na yan, may trend na ‘yan kung ilan naco-consume natin everyday, how much we need for supply for the next 15 days,” she said.

“But if there are people that keep on hoarding and hoarding and probably think that they can sell it more expensive in the next few weeks, then that will really affect us, so let’s guard ourselves against that,” she added.

Undersecretary Alessandro “Sandy” Sales said the Philippines traditionally imports from Asia, with China, South Korea, and Singapore as the dominant sources. It is now looking at securing supplies from the United States, Canada, Australia, and India.

“The US has relaxed the ban on Russian crude trading. India gets a lot of its crude oil from Russia as well, so it will open the tap and we think this action can relieve some of the regional pressures on finished products,” he said in the same briefing.—AOL, GMA Integrated News