Protest incessant oil price increases and obscene profit-taking by oil companies

Marco Valbuena | Chief Information Officer | Communist Party of the Philippines
March 17, 2021
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The Communist Party of the Philippines (CPP) denounces the incessant increases in the prices of petroleum products since the start of the year to quickly make profits for oil companies and add to the hardships of the Filipino people amid the Covid-19 pandemic and severe economic crisis.

Since January 6, diesel prices have gone up by at least ₱5.70/liter, regular gasoline by ₱4.61/liter, unleaded gasoline by ₱4.27/liter and kerosene by at least ₱5.01/liter. Prior to yesterday’s increases, domestic prices of petroleum products have gone up twice more than they were rolled back.

Prices of diesel and unleaded gasoline have been increased eight times and rolled back only three times. Up to March 11, fuel prices have stayed up three times longer than down. Diesel prices, in particular, were kept up for 49 days and stayed down for only 15 days.

The price increases in petroleum products worsen the already heavy burden being suffered by the broad masses of the Filipino people, especially workers, peasants and semiproletariat, in the face of non-stop price increases and low wages and loss of income. Rising prices of fuel products cause further increases in the price of food, transportation and other basic commodities and services.

The Filipino people must demand that prices be rolled back substantially to previous lower levels in order to ease their socioeconomic burden. They can demand controls on fuel prices and removal of additional excise taxes imposed last year by Duterte that are being passed on to consumers.

Oil companies are taking advantage of rising demand for fuel after the lifting of restrictions to obscenely rake in profits to the detriment of the Filipino people. They want to accumulate profits quickly to recover their losses or reduced revenues last year and in the face of threats of possible return of restrictions amid the raging pandemic.

Despite income losses last year due to lockdowns and reduced demand, oil companies led by Petron and Shell remain among the biggest firms that make billions of pesos in profits. Together, the two companies control more than 45% of the local sales of oil products. To maximize their profits, they work together with other oil companies as a cartel to determine prices among themselves.

The Filipino people are being fooled by oil companies and the DOE when they claim that prices of petroleum products must go up everytime and right after global prices of crude oil adjust upwards. How can the previous week’s changes in crude oil prices determine domestic fuel prices when fuel stocks being retailed in the country arrived weeks or months ago?

The Philippines, in fact, no longer imports crude oil. Since last month, 100% of petroleum products sold in the Philippines are imported as finished refined products. Petron shut down its oil refinery in Limay, Bataan in January (scheduled to reopen in the second half of the year), after Shell closed its refinery in Tabangao, Batangas last year.

Chinese refineries have become one of the biggest sources of imported petroleum products. In 2019, 64% of diesel imports came from China. From January to October last year, fuel imported from China surged by 434.1%. Major oil refineries, especially in China, have crude oil stocks lasting 90 to 120 days making them less vulnerable to sudden spikes in global prices of crude oil.

Table: Number of times that prices have been adjusted up and down between January 6 and March 11, based on Department of Energy’s price monitors.

Table: Number of days that prices have stayed up and down from January 6, 2021 up to March 11.

Protest incessant oil price increases and obscene profit-taking by oil companies