Wednesday, October 21, 2009

House Speaker bats for incentives for small RP oil firms

MANILA, Philippines - Speaker Prospero Nograles on Wednesday said that since repealing or even amending the oil deregulation law is next to impossible at this time, the best way for the government to force the "Big 3" oil firms to shun their abusive pricing is to make the small players tougher as competitors.

"It's time to teach them a lesson by building their competition which is the only language they understand. Profit taking is their religion and the government must now drive a hard bargain and support the small ones," Nograles said.

Nograles noted the oil deregulation law apparently fell short of its original intent and spirit that should demolish the old monopolistic practices or cartelization among oil companies to foster competition and bring down prices.

The government, he added, must now consider more drastic measures to ensure that the so-called Big 3 - Shell, Petron and Caltex - are forced to keep their prices within the bounds of reason.

One solution, Nograles said, is to find ways to provide the small players with incentives so that they can expand while making their prices more affordable to the public.

"Right now we have no choice but to patronize the Big 3. They have more stations nationwide and we can hardly find small players. We should encourage these small players to expand by building more pumping stations in areas that are accessible to motorists," Nograles said.

Nograles said small players should also be afforded more opportunities to reduce importation costs.

"If small players are given enough incentives to import oil products they can bring down the prices and force the big players to follow. Today the big players get the incentives yet they blatantly abuse and hoodwink the system with the people at the losing end. Small players should also get government support to import more and compete with the big boys," he added.

Nograles admitted that repealing the oil deregulation law is easier said than done especially at this time when Congress is already racing against time. It might be more realistic, Nograles said, if the executive department, in consultation with Congress, can draw up and implement an incentive scheme to strengthen the small oil players.

"I think that even if we pursue the repeal of the oil deregulation law, we will be racing against time. That's being realistic although we will still try if Congresman Mikey Arroyo's committee could put the issue out on the floor," Nograles said.

"I think we have to study this alternative. If we can provide opportunities to strengthen these small players without going through the regular legislative mill, this can be easier and quicker to implement," he pointed out. (Gil Bugaoisan)

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