Sneaky, Greedy Oil Companies

by Benjie Oliveros

While the media is preoccupied with the impeachment of Chief Justice Renato Corona and its political reverberations, oil companies have been raising pump prices of petroleum products. The continuing increases in pump prices of oil have grave implications on the quality of life of most Filipinos because of its domino effect on the prices and rates of basic commodities, services, and utilities. And yet, it merited a short report from the media.

There have been no explanations from oil companies except to say that prices in the world market have increased because of the tensions between the US and Iran. The Department of Energy, on the other hand, has been justifying the increases, and its inutility, by going to the extent of floating the idea of oil rationing so as to preempt protests.

Really, there is nothing to justify the continuous increases in pump prices: there has been no increase in the costs of producing oil neither has there been a supply shock. Sure, a US or Israel attack on Iran may temporarily affect the supply of oil but this has not happened yet. Why are we already suffering because of the aggression of the US and Israel against Iran when it has not yet gone beyond warnings and provocations?

The answer is simple: speculation and greed. Oil, aside from gold, has been the commodity of choice by speculators, the financial oligarchs. Everybody needs and consumes oil. So all of us are hostages to their speculative machinations and greed. And I bet the biggest portion of futures contracts on oil are being bought and traded by those whose businesses do not consume that much oil; they are merely betting that oil prices would increase by buying futures contracts at a lower price and selling it at a higher price or cashing in on the price difference. The faster the prices of oil increases, the bigger are their gains and the faster they could roll over their capital. And this has a definite effect on the spot market.

Much like in 2007, the only thing that could stop speculators from pushing up the prices of oil is “overheating.” In the parlance of the financial oligarchs, overheating means that the price has gone so high that people start scrimping on their purchases by travelling less, having car pools, among other things.

Before we bombard these financial speculators with expressions of our anger, let us not forget the giant oil companies. It is the oil companies who take the orders and sell these contracts at higher prices even if their costs remain as before and their supplies are adequate. It is also these oil companies that benefit from increases in the spot prices of oil.

Don’t be fooled when Shell, Caltex or Petron justify the increases in pump prices by citing world oil prices. That is a lot of b#*@* They don’t buy from the world market. Because they are local subsidiaries of the giant oil companies, their mother companies merely ship the oil they need.

Last but not the least, let us not forget the government. By refusing to remove the VAT on oil, it gains a lot with the increases in pump prices. Since the VAT is a percentage of the sales (12%), any increase in the price would translate into more money for the government. Isn’t this profiteering? Isn’t this gaining from the people’s sufferings?

By the way, haven’t you noticed? Pump prices reached from P50 to almost P60 per liter in 2007 when world oil prices reached around $170 per barrel. Now that world oil prices are from $102 to S113 per barrel, pump prices are also more than P50 per liter. Another thing, the pump price of oil in the US is $3.50 per gallon, which, when converted, amounts to around $0.87 per liter or P37 per liter. Need I say more? (


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