THE SPIKE in oil prices has taken a toll on our economic and financial viability. Thus, the people are calling for a review of the oil deregulation law.
What is oil deregulation law?
It is Republic Act (R.A.) No. 8479 also known as the Downstream Oil Industry Deregulation Act of 1998.
The purpose of the law is to ensure a truly competitive market under a regime of fair prices, adequate and continuous supply of environmentally-clean and high quality petroleum products.
The law applies to all persons or entities engaged in any and all the activities of the domestic downstream oil industry, as well as persons or companies directly importing refined petroleum products for their own use.
The law defined downstream oil industry in reference to the business of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, marketing and/or selling crude oil, gasoline diesel, liquefied petroleum gas (LPG), kerosene, and other petroleum products.
It is required that the person or entity shall give prior notice to the Department of Energy (DOE) for monitoring purposes.
The law is comprehensive when it comes to procedures on how to maintain price transparency. The DOE has the main function to monitor the daily international crude oil prices and to follow the movements of domestic oil prices.
It likewise monitors the quality of petroleum products. It gives its assessment and comments when it comes to the upward and downward price decisions of different oil industries.
It should promote fair trade practices and prevent cartelization, monopolies, combinations in restraint of trade and any unfair competition.
The DOE together with the Bureau of Product Standards (BPS) of the Department of Trade and Industry, Department of Environment and Natural Resources (DENR), the Department of Science and Technology (DOST), representatives of fuel and automotive industries and the consumers shall set the specifications for all types of fuel and fuel-related products to improve fuel composition for increased efficiency and reduced emissions. The BPS shall also specify the allowable content of additives in all types of fuels and fuel-related products.
ection 14 (e.), Chapter IV of the law provides that “in times of national emergency, when 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 government needs to intervene when oil prices are surging and its increase is persistent. It’s unstoppable when oil prices go unchecked.
However, just a little reminder that the price increase is not directly because of the deregulation. We are an importer of petroleum. When the prices increase abroad, the local oil industries need to adopt the rise of prices. The value of the peso is also depreciating which compounded the increase of the world price of oil.
It must be emphasized that deregulation does not guarantee lower prices but fair prices. But will the government junk the law?/PN
