Oil prices shoot up
Whenever the oil giants wish to raise the prices of their products, they have ready-made excuses at their disposal. They often say the price hikes are necessary to cover company losses or that the increases are brought about by rising prices of crude oil in the world market. Among others, they also usually blame the depreciation of the peso and rising operational costs.
These are all lies. First of all, never in history did the largest multinationals that own the biggest oil companies in the Philippines go bankrupt.
Recently, the annual profits of companies comprising the international oil cartel have not only doubled but have nearly tripled. In 2002, for instance, profits of the world's five largest oil companies grew by an average of 298%. In 2003, their profits swelled by a whopping 926% or almost tenfold owing to the US and UK's heightened control over the oil industry as a result of their occupation of Iraq. Among these companies are Royal Dutch Shell which owns Pilipinas Shell and Chevron-Texaco which owns Caltex Philippines.
Secondly, regardless of whether world crude prices rise or fall, these companies usually hike the prices of their products. They are quick to the draw and immediately raise prices at the slightest increase in crude prices. Despite having two months' worth of oil inventory bought at previous rates, they raise their prices forthwith based on the most recent increase in world crude prices.
 | PRICE OF PETROLEUM PRODUCTS UNDER DEREGULATION
(1996-2001) | | Year | Average price
(P1 per liter) | | 1996 | 6.07 | | 1997 | 6.71 | | 1998 | 7.19 | | 1999 | 8.44 | | 2000 | 11.52 | | 2001 | 13.52 |
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Recent developments provide a stark example. On May 14, Caltex and Shell added P1.00 per liter to the prices of their products when world crude prices soared to a 21- year high of $41.83 per barrel. Barely two weeks later, Shell added another peso to very kilogram or P11.00 to every tank of liquefied petroleum gas.
In June 4 and 5, prices of petroleum products were raised by another 90 centavos and another round of price hikes is being planned for next week. The oil companies are expected to raise their prices by P1.25-P1.80. The cartel is taking advantage of skyrocketing prices of crude oil due to the turmoil in the Middle East.
Although this has been the trend since the beginning, such behavior by the oil giants gained more momentum when the reactionary government deregulated the oil industry in 1996. (See chart)
At any rate, the cartel's pretexts for hiking oil prices are wornout. They can no longer gloss over the fact that it is greed for profit that has been jacking up prices of petroleum products. The avaricious oil companies are experts at perpetrating all manner of fraud to satisfy their selfish interests. (For a more thorough discussion of the issue, refer to the primer "Monopolyo atbp." published by the CPP Information Bureau in May 2002.)
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