Oilink

MANILA, Philippines—President Macapagal-Arroyo’s order placing a price ceiling on oil products will last throughout the duration of the state of calamity she had declared in the wake of the recent storms.

Anthony Golez, her deputy spokesperson, on Monday vowed that Executive Order No. 839 would be “strictly implemented” both by the Department of Energy (DOE) and the Department of Justice (DOJ).

Executive Secretary Eduardo Ermita said he would phone officials of Petron Corp., which is partly owned by the government, to “set a good example” to other oil companies.

“They should be the first to follow the President’s executive order,” he said in a radio interview.

The EO, dated Oct. 23, directs oil industry players “to retain the level of the retail price of petroleum products prevailing on Oct. 15, 2009, which was one week after the last landfall of Tropical Depression "Pepeng.’’ As a typhoon, Pepeng made landfall twice in northern Luzon.

Oil firms raised prices on Oct. 20—P1.25 per liter for gasoline and P2 per liter for diesel.

Ms Arroyo said the order would take effect “for the duration of the state of emergency in the entire Luzon.”

“This is an answer to the needs of our people,” Golez told reporters. “Especially now that the country is undergoing quick recovery and rehabilitation, we really need the cooperation, not only of the oil companies, but of all sectors.”

In the order, Ms Arroyo said the government had to “respond immediately to the clamor of the Filipino people to prevent unreasonable increase in the prices of petroleum products during the state of calamity.”

“The government must exercise the powers conferred upon it within the limits set by the laws to prevent predatory pricing, unreasonable pricing, cartelization, among others, which the oil industry players may resort to,” she said.

Ms Arroyo directed the joint DOJ-DOE task force to “monitor the implementation of this order and to institute complaints against violators.”

Golez said the EO could work “both ways,” meaning oil companies would also benefit if prices dropped below the Oct. 15 levels. In that case, he said oil firms would still sell their products at a higher rate and enjoy bigger profit.

“This EO has been thought of,” he said. “This can work both ways, but will work for the general welfare of our people.”

Golez warned that defiant oil companies would “have to face the consequences.”

The EO cites Section 14 (e) of the Oil Industry Deregulation law that empowers the Department of Energy to temporarily take over or direct the operation of players in the downstream oil industry.

“In times of national emergency, when the public interest so requires, the DOE may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any person or entity engaged in the industry," the deregulation law said.