Archive for the ‘oil’ Category

Congress won’t give GMA ‘crisis’ powers

June 7, 2008

By Aurea Calica and Delon Porcalla
Saturday, June 7, 2008

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Congress is not keen on granting emergency powers to President Arroyo to address the emerging food and energy crisis.

Senate President Manuel Villar said Mrs. Arroyo would be able to address the situation without special powers granted by Congress.

Villar said the Chief Executive is inherently equipped with enough powers to ensure the public’s welfare in the face of the upward spiral of prices of basic commodities.

“The President is armed with sufficient powers to help alleviate the lives of the poor, while we in the Senate are willing to cooperate with the executive,” Villar said.

Speaker Prospero Nograles said the government could weather the impending food and energy crisis even without the President using her powers to address the situation.

“Our government is in full control and we have good economic fundamentals in place. We will weather the economic storm. Think positive,” Nograles said.

The two leaders of Congress were reacting to Malacañang’s announcement that Mrs. Arroyo has signed an executive order laying the groundwork for exercising her emergency powers under the Constitution in the event of a food and energy crisis in the country.

Mrs. Arroyo signed on June 2 Executive Order 728 which would enable her to exercise emergency powers under the National Food and Emergency Council (NFEC).

Albay Gov. Joey Salceda, the President’s economic adviser, justified the executive order by saying Mrs. Arroyo might be forced to take preemptive measures to prevent a full-blown crisis.

Salceda maintained the President is entitled under the Constitution to make the “preemptive strike.”

Press Secretary Ignacio Bunye and Deputy Presidential Spokeswoman Lorelei Fajardo, in separate statements, defended the President’s move to create the NFEC.

“The President is quick to recognize the impending problems and as such has the foresight to create the Council to deal with the situation,” Fajardo said. “Action and governance and not politics are the reason for the Council’s creation.”

Bunye said the NFEC would make a five-year projection on the prices of food commodities and energy sources.

While the provision on emergency powers was inserted into EO 728, Bunye explained the matter has “to be deliberated upon depending on the situation at a particular time, recommendation will be made to the President and to Congress.”

“The Council (NFEC) shall advice the President and Congress if emergency powers are required. We will have to await advice of the Council,” Bunye said.

While the Constitution mandates the President to seek the concurrence of Congress in exercising emergency powers in relation to national security, Chief Presidential Legal Counsel Sergio Apostol explained the Constitution is silent when it comes to emergency powers of the President on economic matters.

Salceda, on the other hand, urged Mrs. Arroyo to implement stronger steps to prevent a full-blown food and oil crisis.

Salceda, howeve,r said he would prefer to give his recommendations first to the President before publicly disclosing it.

When asked to describe a possible scenario in which the President would exercise her emergency powers, Salceda said the government could take over rice warehouses and power firms.

He said government could control the distribution of rice and fuel and later compensate the private sector.

“The problem is we haven’t seen this before so it’s hard to speculate,” Salceda said.

Wrong signal

Villar, however, said Malacañang should take the initiative to talk to Congress on what measures are needed without resorting to emergency powers.

He said granting emergency powers to the President in times like this “is not good for a democracy.”

Senators Manuel Roxas II, Pia Cayetano, Miriam Defensor-Santiago and Juan Miguel Zubiri said the use of emergency powers would send the wrong signal to the international community.

Roxas said Mrs. Arroyo has over P1.2-trillion budget and the power to implement laws like the Price Control Act in case of calamities.

Roxas said the situation would not call for a takeover of certain public utilities, which forms part of emergency powers.

Cayetano, for her part, said Mrs. Arroyo “has all the powers at her disposal to investigate and prosecute unscrupulous traders, dismantle food cartels and shield consumers from overpricing and other forms of abuse.”

“The rice crisis caught this administration flat-footed, not because it lacked emergency powers but due to its failure to implement a long-term rice sufficiency program,” she pointed out.

Cayetano cited the failure of the Energy Regulatory Commission to curb abusive practices of power generators and distributors as one of the reasons why the country has one of the highest electricity rates in Asia.

Santiago, on the other hand, said the economic crisis is a global problem.

“(This crisis) is out of our hands, it is being caused by the higher price of oil and by the international food shortage,” Santiago said.

“There is nothing we can do. We are not an isolated island where all of these things are just happening to us,” she said.

Santiago though agreed President Arroyo may exercise her emergency powers which is allowed under the Constitution.

“She (the President) should adhere strictly to the conditions of the Constitution and the Senate will be the first to protest if she does it prematurely,” Santiago said.

Zubiri, for his part, said granting emergency powers to the President is not justified under the present situation, unlike in other countries where there is massive breakdown of law and order as manifested in food riots.

Zubiri said it would send a wrong signal to the international community even as the government still has other options available to control the situation.

Other options

Congressmen led by Nograles called on Malacañang to discuss other options available, short of exercising emergency powers, to prevent the impending food and energy crunch.

“The President won’t need emergency powers as long as we all work together to defeat any possibility that the situation will escalate into a crisis situation,” Nograles emphasized, saying that various subsidy programs of the government that are being carried out will keep the economy afloat.

“(These programs are) positive actions that would cushion the impact of the global economic situation,” he said.

Nograles said subsidies the government has been extending to the poorest of the poor should be expanded to include the middle class and lower middle class, since they constitute the biggest bulk of diligent taxpayers.

“We also have to protect the middle class and the lower middle class. The country’s survival is largely dependent on their contributions to our economy,” he said.

Nograles proposed the government’s P2-billion power subsidy for residential users with a monthly consumption of 100 kilowatt-hours should be expanded to P6.5 billion to cover middle and lower middle class power users with 500 kWh consumption per month.

Opposition Rep. Roilo Golez, for his part, expressed support for President Arroyo’s exercise of emergency powers.

He said the President must declare in two separate issuances that the nation is facing a food crisis and an energy supply and pricing problem.

“The period of emergency must be limited, at most six months, to enable government to acquire necessary equipment, materials and supplies, and complete the bids and awards process,” he said.

His third condition: the administration and implementation of the emergency program must be handled by “capable hands.”

Golez, a former Navy officer and national security adviser to Mrs. Arroyo, questioned the capability of Energy Secretary Angelo Reyes to carry out such program.

“There is bipartisan doubt (in Congress) on whether the incumbent energy secretary is capable to run his department in normal times, more so during an emergency. He appears to be part of the problem,” he said.

Former President Joseph Estrada, meanwhile, said the emergency powers being cooked by Malacañang for Mrs. Arroyo is merely a “band-aid” solution to the food and oil crises.

Estrada said the Arroyo administration must do away with stopgap solutions to the country’s problems.

“The people are now hungry. What they wanted is that the people are hungry and fearful as well. An emergency power for the president is just a band-aid solution. What this administration should do is to improve rice production,” Estrada said. –With Paolo Romero, Jess Diaz, Jose Rodel Clapano(PStar)

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RESTORE OIL INDUSTRY REGULATION TO ENSURE TRANSPARENT, REASONABLE PRICING

June 5, 2008

The recent announcement by local oil companies that they would need to increase oil prices by as much as P10 to P11 per liter highlights the urgency of reinstating regulation of the oil industry, according to independent think-tank IBON Foundation.

IBON said that deregulation has not affected the domination of the three major oil companies (Shell, Petron and Chevron) of the local petroleum market. Instead, it has merely given the oil giants more room to manipulate pump prices since their transactions with their parent companies abroad have become even less transparent with price adjustments no longer subject to public hearings. The unregulated environment gives oil firms greater freedom to overprice and engage in transfer pricing.

The think-tank further pointed out that the recent P1.50 hike in pump prices implemented at the end of May was the largest hike since October 2001 when average retail prices went up by P1.20 per liter. It added that the oil companies are threatening even higher weekly hikes of P2 per liter allegedly to speed up recovery of their costs.

Data from the Department of Energy show that the three major oil players continue to control the bulk of the downstream oil market since the 60 new entrants that have entered the sector since 1998 accounted for an average of only 12% of total market share since the oil industry was deregulated.

IBON added that high world oil prices remain a result of the dominance of a few giant oil transnational companies – such as Royal Dutch Shell, Chevron Texaco, Total and Exxon Mobile – over the global oil industry. Oil prices are pushed up further by unhindered speculation in global oil futures markets. The monopoly of the oil giants over the downstream and upstream levels of the industry makes them immune to the effects of supply and demand and allows them to dictate the prices at which they sell their products independent of changes in crude oil production. (end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

Angelo Reyes gags oil firms on price hikes

June 5, 2008

By Euan Paulo C. Añonuevo, Reporter

Energy Secretary Angelo Reyes ordered oil companies to desist from disclosing to media future fuel and cooking-gas price hikes.

During a stakeholders’ meeting Wednesday organized by the Department of Energy, Reyes said the oil firms should stop making early announcements on price increases so as not to cause undue panic and anxiety on consumers.

“It will not serve anybody any good if they will make announcements based on their own projections,” he added.

Reyes’ order came about after media clarified whether his earlier remarks lambasting Arnel Ty, head of Liquefied Petroleum Gas Marketers Association, during the meeting meant a stop to early price-increase announcements.

The Energy chief had castigated Ty for being too open to media about the group’s future price adjustments—a practice not common among larger oil firms—such as the P3.50 per kilogram increase that the marketers association tagged on its liquefied petroleum gas products a week ago.

The cooking-gas retailers’ adjustment was announced much early on while big oil companies made their own public announcements only a few hours before implementing their own price hikes.

In front of media, transport groups and officials of the government and oil firms, Reyes told Ty that he “should not speak for everybody” and that his group should instead be “competing with each other [in the group].”

He said the marketers’ association is “increasing prices ahead of everybody” and is also in the forefront when cooking-gas prices go down just to look good in public.

But Ty said his group’s cooking-gas price for its 11-kilogram cylinders, which costs about P610 each, is not enough to influence prices as it is still the lowest in the industry.

Under the Downstream Oil Industry Deregulation Act of 1998, oil firms are allowed to automatically increase their pump prices but are not compelled to announce such move to the public.

But the Energy department requires oil companies to inform the department within one day, but not less than six hours, of any move to increase prices and any public announcements related to this.

Despite the public berating, Ty later told media that his group will comply with the Energy secretary’s order but stood by the legality of the group’s price adjustments, which he said can be attested to by their supplier, Liquigaz Philippines Corp.

“The [Energy department] knows best. We will just follow it first,” he said.

Ty added that the marketers association will also be attending future meetings organized by the department to come up with a system for making announcements on price adjustments.

Other oil company officials present during the industry meeting deferred to Reyes’ order, saying that making early disclosures on price adjustments may lead to hoarding of petroleum products.

Rate adjustments ‘reasonable’

Ironically, while Reyes questioned the Ty group’s price adjustments, a report released during the meeting by Peter Lee U, University of Asia and the Pacific School of Economics dean, found that price adjustments implemented by the oil firms are “reasonable.”

The study, which was commissioned by the Energy department for a pittance, however, focused only on Petron Corp. and Pilipinas Shell Petroleum Corp.’s price adjustments from December 2006 to November 2007. The two firms represent 70 percent of the total petroleum market in the country.

“Oil price increases have been reasonable. They were not out of line and are consistent with what they are saying that they have under-recoveries,” Lee U said.

He added that while many analysts are saying that oil prices may continue to stay at high levels abroad, the best protection government can offer to consumers is to have the petroleum industry be more open to new players to spur competition.

“The country needs a credible competition policy with an enforcement agency,” Lee U said.(ManilaTimes)

VAT One of the Culprits in Oil Price Increases

June 3, 2008

Citing data that the VAT on oil is one of the main culprits in the surge in oil prices,  consumer group Kontra-KulimVAT initiated a petition campaign for the scrapping of the value-added tax (VAT) on petroleum products as well as power rates.

BY RONALYN OLEA
Bulatlat
Vol. VIII, No. 17, June 1-7, 2008

With the weekly surge in oil prices, the latest of which is a P1.50 ($0.03) increase – the highest in recent months – Consumer group Kontra-KulimVAT (literally: against theft) initiated a petition campaign for the scrapping of the value-added tax (VAT) on petroleum products and power rates.

Kontra-KulimVAT was formed in 2005 at the height of the campaign against the imposition of VAT on goods and services. It has been revived recently amid the rising prices of oil, power and basic commodities.

Anti-VAT advocates initially gathered signatures from commuters of rail transits on May 23 and May 30. At the North EDSA station of the MRT, people from all walks of life signed the petition. In less than two hours, Kontra-KulimVAT said they get an average of 1,000 signatures from every station.

Urgent

In a statement, Arnold Padilla, spokesperson of Kontra-KulimVAT said, “If government truly intends to ease the people’s burden, one of the most urgent and doable policy reforms is the removal of VAT on oil and power.” Padilla said the petition drive aims to pressure legislators to rush the approval of bills removing the VAT on oil and power before Congress takes a break in mid-June.

The Bagong Alyansang Makabayan (Bayan) earlier revealed that the scrapping of VAT on petroleum products will bring down the prices and will benefit millions of households and drivers of public utility vehicles.

Estimated benefits of oil VAT cancellation based on 7 May 2008 prevailing prices in NCR

Sector

How much do they spend on oil?

How much will they save without the oil VAT?

How many will benefit? (nationwide)

With VAT

Without VAT

Jeepney drivers using 30 liters of diesel per daily trip

P1,246.20 per daily trip

P1,096.66 per daily trip

P149.54 per daily trip

426,572 jeepney drivers

Tricycle drivers using 4 liters of unleaded gasoline per daily trip

P194.24 per daily trip

P170.93 per daily trip

P23.21 per daily trip

581,578 tricycle drivers

Small fishers using motorized bancas with 10 liters of regular gasoline per fishing trip

P458.60 per fishing trip

P403.57 per fishing trip

P55.03 per fishing trip

708,000 small fishers

Households using 11-kg LPG tank

P573.61 per tank

P504.78 per tank

P68.63 per tank

8.6 million households

Households using 4.2 liters of kerosene per month for lighting & cooking

P185.30 per month

P163.07 per month

P22.24 per month

9.4 million households

Sources of basic data: DOE, LTO, IMF, NSO, Piston, Pamalakaya, interviews

VAT as the culprit

The VAT on petroleum products is the biggest chunk in the total VAT collections of the Arroyo government.

In an interview, Sonny Africa, research head of IBON Foundation, said that besides the oil deregulation law, the imposition of VAT is one of the main reasons for the increase in prices of petroleum products.

Based on data from the Department of Finance (DOF), P49.20 billion ($1,124,57,428 at an exchange rate of $1=P43.75) was collected from VAT on petroleum products in 2006. This accounts for 63.9 percent of the total VAT collections that year. From January to July 2007, of the P42.7 billion ($976 million) VAT collections, 43.5 percent or P18.6 billion ($425,142,857) was collected from VAT on petroleum products.

Kontra-KulimVAT, citing data from the DOF, noted the VAT increases in petroleum products. From P4.24 ($0.09) per liter in 2006, VAT on oil increased to P4.38 ($0.10) per liter in 2007. As of May 2008, the average VAT on oil is pegged at P5.06 ($0.115) per liter.

Padilla said that the Arroyo administration earns around P5.5 million ($125,714) daily for every P1 ($0.02) per liter increase in pump prices. “This explains why the Arroyo government does not want to scrap the VAT and control oil prices.”

In one of his last statements as press secretary, Secretary Ignacio Bunye said that removing the VAT on oil would result in more problems.  He said that removing the VAT on oil would affect the credit worthiness of the Arroyo government and would weaken the peso. He said that this would eventually increase the prices of petroleum products even more.

Africa said that removing the VAT on oil would result to a more positive rather than negative impact.

Meanwhile, based on May 2008 Meralco rates, Kontra-KulimVAT said that residential consumers will save an average of 72 centavos ($0.016) per kilowatt-hour if VAT is removed. Official data from the Department of Finance (DOF) show that in 2007, the Arroyo government collected P11.4 billion ($260,571,428) VAT on power.

Not for social services

The groups debunked the DOF’s claim that canceling the VAT on oil and power will “impair the delivery of services” by government.

Padilla pointed out, “When the DOF pushed for the imposition of the VAT on oil and power in 2005 due to pressure from the International Monetary Fund (IMF), social services were never in the equation. Their primary concern then, and now, was the country’s credit worthiness. They wanted to assure foreign creditors that government can pay its debts, not to raise more funds for public hospitals, housing or education.”

Independent think-tank IBON Foundation estimates that 87 percent of government revenues go to debt payments. It is equivalent to 11.8 percent of the country’s Gross Domestic Product (GDP) each year.

Padilla concluded, “We could not afford any further delay in the scrapping of the VAT on oil because prices continue to go up. Over the weekend, oil firms jacked up their pump prices and they will implement more increases in the coming weeks. We hope Congress appreciates the urgency of the problem.” Bulatlat

Analysis: Peak Oil or Peak Prices

June 3, 2008

Peak Oil or Peak Prices

World oil prices finally dropped by $4 per barrel May 29 when there seems to be no end to the surge in oil prices.  Is the volatility of oil prices caused by Peak Oil or Peak Prices?

BY BENJIE OLIVEROS
ANALYSIS
Bulatlat
Vol. VIII, No, 17, June 1-7, 2008

Relief is seemingly in sight for consumers as the price of oil has dropped an average of $4 to $ 126.73 for light, sweet, crude traded at the New York Mercantile Exchange (NYMEX) and to $127.40 for London Brent oil , which is traded at the ICE futures, last Thursday May 29.  The drop in oil prices came just a week after it reached a peak price of $135 per barrel, which is about twice its price last year. Until May 29, there seems to be no end to the soar in oil prices.

One of the reasons being cited for the drop in prices was the slowing down in global energy demand. The US oil demand in March was said to be the lowest for that month in the last five years; while the April demand for oil in the Britain reportedly fell 7 percent compared to last year. This was seen as a sign that oil consumption is starting to strain under the pressure of high prices. There were also fears that the move of Asian countries such as India, Taiwan, Indonesia, and Sri Lanka to reduce fuel subsidies would also push demand downwards as pump prices in their respective countries increase.

The appreciation of the US dollar was also cited as one of the reasons for the drop in oil prices as it supposedly diminished the purchasing power of buyers that are using other currencies in commodity futures markets. It is interesting to note that when oil prices surged last May 21, one of the reasons cited was the weakening of the dollar supposedly making oil cheaper for some buyers.  They can’t seem to make up their minds whether it is the strengthening or the weakening of the dollar that causes oil prices to surge.

What could also not be explained satisfactorily by analysts is that oil prices dropped despite a US Energy Information Administration report showing a 8.8 million barrel drop in US oil stockpiles –  reportedly the biggest supply drop since a hurricane in 2004 forced the closure of offshore oil platforms – which was released on the same day.  This was simply dismissed as insignificant.  But when the US Department of Energy reported a 5.4 million barrel drop in US stockpiles last May 16, oil prices surged to its peak price of $135 per barrel.

It makes one wonder, what is really causing oil prices to surge and what made it drop by $4 per barrel recently?

Peak Oil

Many analysts are pointing to “Peak Oil” as the underlying reason for the volatility in oil prices. M. King Hubbert, a Shell geophysicist from San Saba, Texas, came up with the Peak Oil theory in the 1950s. He put forward the prediction that oil production is nearing its peak as the output of old oil wells would decline, as oil, a fossil fuel, is a non-renewable resource. It was reported that he accurately predicted that US oil production would peak in 1970. The oil crisis of 1973 was attributed to this.

But Peak Oil theorists could not agree when global oil production would peak and eventually decline. Nevertheless, many analysts believe that the growing oil demand, especially from India and China, and declining oil production is the fundamental reason for the surge in oil prices.

Elizabeth Souder of the Dallas Morning News wrote that T. Boone Pickens, a Texan pushing for the Peak Oil theory, is accurate in his predictions regarding the movement of oil prices.  He reportedly predicted last May 20 that oil prices would reach $150 per barrel by the end of the year.  And sure enough, oil prices reached $129 per barrel that day, $130 the next day, and $135 per barrel the day after.  But Pickens is not merely an analyst or a Peak Oil theorist.  He is an oilman running a multibillion dollar commodities hedge fund. In other words, he can make his predictions a reality by bidding for oil futures contracts.

Richard Heinberg wrote for AlterNet that while speculation is currently driving oil prices up, it is merely a symptom, the fundamental reason being the growth in demand amid declining supplies. Other subscribers of the Peak Oil theory attribute the spikes in oil prices to a combination of factors to include declining production, growing global demand, the weakening (or strengthening?) of the dollar, the refusal of the Organization of Petroleum Exporting Countries (OPEC) to increase the supply of oil in the world market, and speculation.

In a May 22 report of the Philippine Daily Inquirer regarding the surge in oil prices, Tony Nunan of Mitsubishi Corporation’s international petroleum business reportedly said that concerns over supplies are driving prices up. But he was also quoted as saying that the oil “market is technically and fund-driven right now,” meaning investors in oil are driving current prices up.

Even Peak Oil theorists admit that oils futures traders (read:speculators) are making a killing with the oil price spikes.  One trader was quoted as saying that he made a fortune in oil during the last two months. And if oil futures traders are making a fortune more so are the big oil producers.

Which is then the cause and which is the symptom?

Peak Prices

It is true that fossil fuel is non-renewable and global oil consumption is increasing; and eventually oil would become scarce.  When? Nobody knows for sure as even Peak Oil theorists face a blank wall when gathering data about oil production and reserves.

But this should not cause the current volatility in oil prices as there has been no shortage in supply for the last three and a half decades, despite the numerous predictions of supply disruptions because of wars, political instability in oil producing countries, and natural calamities.

The last time the world experienced a shortage in supply was in 1973 during the oil crisis.  And as far as I know, it was caused by the decision of OPEC to control production and raise the price of oil from $7 to $11 per barrel, not by the decline in US oil production.

Peak Oil should make people think about cutting down on oil consumption.  It should result in a serious effort to search for alternative sources of energy. But it is too early to cause demand or supply shocks.

Oil futures traders are buying oil not to save for a rainy day or prepare for a shortage. They gobble up oil futures contracts in the hope that when they are ready to sell it, prices have gone up more thereby giving them higher returns. The bids for contracts goes higher and higher until the market overheats: meaning real demand goes down as the pressure of high oil prices becomes too much to bear.

Thus, if demand continues to go down, so will oil prices.  Then, we could say that finally oil has reached its peak price. Speculators could no longer push the prices higher.

Economists could not believe that mere speculation could drive prices up.  But international mobile capital lodged in banks and hedge funds have become so large that it can influence not only prices of commodities and stocks but also the state of economies.

In 1990, there was $1.2 trillion in international mobile capital, with $468 billion in syndicated bank loans and $756 billion in stock and bond markets. By 1993, international mobile capital almost tripled to $3 trillion, $555 billion in bank money and $2.3 trillion in stock and bond markets. Currently, international mobile capital has reached a staggering $160 trillion.

Another proof that speculation is the main driver of oil prices?  Have you noticed that the benchmark in oil prices is derived from the prices of future deliveries at NYMEX and ICE Futures and not current ones? Dubai crude may be the regional benchmark but it follows the direction of the NYMEX and ICE Futures.

We just hope that the relief caused by the steep drop in oil prices becomes a reality by resulting in a reduction in pump prices.  The problem is oil companies are quick to the draw in increasing pump prices when prices of oil in the world market go up but are slow and conservative in reducing prices. In fact, domestic pump prices even increased by P1.50 ($0.03 at an exchange rate of $1=P43.75) per liter this week. By the way, it is worth noting that India, Taiwan, Indonesia, and Sri Lanka have been subsidizing fuel prices to cushion the impact of oil price spikes on their citizens but our government is not. Bulatlat

Konteksto: Danilo Araña Arao

June 3, 2008

Usapang Langis

Sa gitna ng sunud-sunod na pagtaas ng presyo ng langis, hindi dapat pagbanggain ang interes ng mga nasa sektor ng transportasyon at ang nakararaming commuter. Hindi po ito usapin ng kung gaano ba dapat itaas ang pamasahe o kung anong moda ng transportasyon ang mainam para sa nakararaming mamamayan. Nananatiling ugat ng problema ang deregulasyon sa downstream oil industry na nagbunga ng malayang pagtatakda ng presyo ng mga produktong petrolyo.

NI DANILO ARAÑA ARAO
Konteksto / Pinoy Weekly
Inilathala ng Bulatlat
Vol. VIII, No. 17, June 1-7, 2008

Habang sinusulat ang artikulong ito, nangako ako sa aking sariling hindi gagamit ng pinakahuling datos ng presyo ng langis dahil malamang na maluluma rin ito sa ilang araw lang.

Ang karamihan sa atin ay tila nahihilo, nalulula at naluluha sa sunud-sunod na pagtaas na presyo ng petrolyo. Ang sinabi nating ”mataas” ilang buwan na ang nakaraan ay naging ”sobrang mababa” na ngayon, kung ang ating pamantayan ay ang kasalukuyang presyo. Para din itong pangkalahatang pagtingin sa diktadurang Marcos ngayon: kumpara kasi sa kasalukuyang nakaupo sa Malakanyang, lahat ng mga nagdaang presidente ay tila santo.

Gustuhin ko mang kunin ang pagkakataong ito para ipaliwanag ang bentahe ng pagmomotorsiklo sa konteksto ng malayuang biyahe at mas matipid na paggamit ng gasolina, alam kong maraming motorista ang kokontra dahil ang sobrang taas ng presyo ng mga produktong petrolyo ay may direktang epekto na rin sa lahat ng klase ng behikulo. Kung noon, halimbawa, ay nakakaya kong magpa-full tank ng aking motorsiklo sa halagang P100 lang, ngayon ay wala pa sa kalahati ang napupuno sa halagang ito.

Kahit ang mga tinaguriang alternatibo tulad ng Auto LPG (liquefied petroleum gas) at Biogas ay apektado rin ng sunud-sunod na pagtaas ng presyo ng langis. Bagama’t mas mababa ang mga ito sa iba pang produktong petrolyo, partikular ang may matataas na octane rating, nagiging masakit na rin sa bulsa ang paggamit ng mga ito, lalo na sa panahong kakarampot lang ang itinaas at inaasahang itataas sa sahod ng mga manggagawa.

Kung iisipin lang natin ang ating sarili, madaling sabihing magtipid na lang tayo sa paggamit ng mga produktong petrolyo o iwasan na ang paggamit ng mga ito. Sa halip na gamitin ang sariling sasakyan, sumama na lang sa car pool ng kompanyang pinagtatrabahuan o mag-traysikel, dyip at LRT (light rail transit). Kung malapit lang ang pinapasukan, bumili na lang ng bisikleta at gamitin ito sa pagbiyahe: Mura na, de-padyak pa at hindi pa mahirap iparada. O kung gusto mo talagang makatipid at kaya pa naman ng iyong katawan, subukin mo na lang maglakad!

Pero ang problema, hindi opsyon ang mga ito para sa mga nasa sektor ng transportasyon tulad ng mga drayber. Ang anumang pagtitipid nila sa paggamit ng produktong petrolyo ay mangangahulugan ng paglimita sa kanilang pagbiyahe, na magreresulta sa pagbawas sa kakarampot na nga nilang kita bawat araw. Kailangan nilang pumunta sa mga istasyon ng gasolina at magpakarga kung gusto pa nilang magpatuloy sa kanilang pamamasada.

Nakakadagdag sa init ng ulo ng mga drayber ang matinding trapik sa mga lansangan, dahil alam nating mas malaki ang nakokonsumong gasolina kung ang mga sasakyan ay pahinto-hinto’t mabagal ang takbo. Delikado mang gawain ito, madalas na napipilitan silang lumabag sa batas-trapiko para mas makarami ng biyahe. Dahil sa abnormalidad sa industriya ng langis at kultura ng lansangan, nagiging bahagi ng kanilang araw-araw na pamamasada ang swerving, speeding, beating the red light at illegal loading and unloading.

Karapatan ng mga drayber ang manawagan para sa mas mataas na pamasahe, at habang sinusulat ito’y mayroong ipinapatupad nang singkwenta sentimos na provisional increase para sa mga dyip, kaya ang unang apat na kilometrong pagbiyahe ay nagkakahalaga na ng P8.00. Pero mapapansing ang iba’t ibang grupong pangtransportasyon ay maingat sa paggawa ng panawagang ito, hindi lang dahil maraming magagalit sa kanila kundi dahil baka mabawasan ang mga sasakay kung sa tingin nila’y sobrang mataas na ang pamasahe.

Sa gitna ng sunud-sunod na pagtaas ng presyo ng langis, hindi dapat pagbanggain ang interes ng mga nasa sektor ng transportasyon at ang nakararaming commuter. Hindi po ito usapin ng kung gaano ba dapat itaas ang pamasahe o kung anong moda ng transportasyon ang mainam para sa nakararaming mamamayan. Nananatiling ugat ng problema ang deregulasyon sa downstream oil industry na nagbunga ng malayang pagtatakda ng presyo ng mga produktong petrolyo.

Para sa mga nasa kapangyarihan, hindi deregulasyon ang problema kundi isang solusyon, basta’t bigyan lang ng tsansa ito. Labindalawang taon na ang nakaraan mula nang tanggalin ang regulasyon sa downstream oil industry at ito ay nagbunga lang ng sunud-sunod na pagtaas ng presyo ng langis at mangilan-ngilang rollback. Ang pagpasok ng iba pang kompanya ng langis ay walang naging epekto sa kalagayan ng presyo.

Totoo namang mas mainam na magbisikleta na lang o maglakad para hindi maging alipin ng sunud-sunod na pagtaas na presyo ng petrolyo, pero may isang bagay pang magagawa ang nakararaming Pilipino. Puwede tayong sama-samang magbisikleta o maglakad papunta sa Malakanyang para iparating ang ating kolektibong hinaing, at para ihain ang solusyon – ang pagbasura sa deregulasyon. Pinoy Weekly / Inilathala ng Bulatlat

Para makipag-ugnayan sa awtor, pumunta sa www.dannyarao.com.

P2-B subsidy to pay for electricity bills

June 1, 2008

THE GOVERNMENT HAS SET ASIDE A P2-BILLION SUBSIDY as a way to help the poor pay their power bills.

Social Welfare Secretary Esperanza Cabral said Saturday she would present her proposed cash transfer program for small electricity users at the first meeting of the Presidential Task Force on Energy in Malacañang on Monday.

Cabral has been assigned by President Macapagal-Arroyo to draft a cash transfer program for small electricity users using P2 billion, which is part of the P4 billion earlier earmarked by Ms Arroyo for allocation to help people cope with soaring energy costs.

The P4 billion is the money so far collected by the government from the value-added tax (VAT) on electricity. Officials expect the amount to reach P18 billion this year.

“This [subsidy] is help for the poor because power costs have gone up,” Cabral said in a phone interview.

She said the “target” of the cash transfer was the 1.9 million small users of electricity, or those called lifeline users consuming less than 100 kilowatt hours a month in areas covered by Manila Electric Co. (Meralco).

These lifeline users are being served by Meralco in Metro Manila and the provinces of Cavite, Pampanga, Bulacan, Rizal and Quezon.

Cabral said that if she were to calculate the allocation of the P2-billion cash transfer, 1.9 million lifeline users would be entitled to P1,000 a year, or P100 a month.

The subsidy will help, for example, a user of 50 kWh of electricity a month whose bill is P212, she said.

Going by this estimate, Cabral said, the subsidy could be given to small electricity users for a period of from 10 months to one year.

“These are all tentative options that I will present to the task force,” she said.

Cabral said she had yet to decide whether this cash transfer program would cover lifeline users in Metro Manila only, or those in the entire Meralco franchise area (National Capital Region, Region 3 and Region 4A).

She said she also had yet to decide on the mode of the cash transfer — “whether this would be in one lump sum, or every quarter or every semester.”

She added that she was likewise still studying the requirements to be imposed on the beneficiaries of the cash transfer. One option is for small electricity users to present their last monthly bill to authorities she said.

Unlike the other cash transfer programs of the Department of Social Welfare and Development, this love cannot be a conditional one because of, among others things, the small amount involved, Cabral said.

“It’s really just a subsidy to help them get by,” she said.

Malacañang had earlier announced a government plan to use the VAT on oil for the people’s benefit.

Lawmakers are seeking the scrapping of the VAT on oil. But Palace officials have opposed this, saying at one point that it would be “a cure worse than the disease.”

After last week’s Cabinet meeting in La Union, Press Secretary Ignacio Bunye said Malacañang’s plan was “to give back to the people” the proceeds of the VAT on oil.

Bunye said that the Palace had earmarked P4 billion for the people — P2 billion to go to the conditional cash transfer program of the DSWD, P1 billion in assistance to the transport sector (particularly for the conversion of vehicles to gas-fueled vehicles), and another P1 billion for loans and assistance to schools.

During the meeting, Ms Arroyo ordered the reactivation of the Presidential Task Force on Energy and gave it two weeks to come up with a contingency plan on how the country could cope with the rising costs of power and oil.

Cabral’s report will apparently be part of the task force’s contingency plans.

(PDI)

===============

My Take: Pinabayaan ng gbyernng magkamal ng mlaki ang mga kompanya ng langis at kuryente.  at ngayon, ang pera natin ang ipambabayad pa nila?  Ganito na lang ba lagi? Legal na pagnanakaw sa kaban ng bayan?

Exploration project overwhelmingly rejected in referendum

May 27, 2008

Danny Fajardo

CEBU CITY — There seems to be no letting up on oil exploration in Cebu waters as an Australian-based company will start exploratory oil and gas drilling in Argao in August.

Department of Energy (DoE) resource division chief Eduardo Amante said NorAsian Energy Limited will conduct its oil drilling after confirming, through a seismic survey in 2007, that Argao has potential for petroleum resources.

Amante said the oil drilling will be conducted outside the protected marine sanctuaries of Argao waters.

Meanwhile, Cebu Provincial Board Member Victor Maambong insisted that public hearings must be conducted first before proceeding with the oil explorations activities.

Maambong also criticized the firm for not presenting any comprehensive insurance fund for residents whose livelihoods might be affected by the drilling.

He said NorAsian had not yet secured an environmental compliance certificate (ECC) from the Department of Environment and Natural Resources (DENR) and from other local government units.

Earlier, Japan Petroleum Exploration Co., Ltd (JAPEX) has aborted its oil exploration activities after announcing that there is no sufficient deposit of commercial oil deposited in Tañon Straits, a protected seascape between Cebu and Negros islands.

According to Amante, NorAsian assured the people it would provide assistance for any disturbance that might affect the residents’ livelihood.

He also said NorAsian Energy is establishing measures to protect marine environment, fish catch study and marine mammal observation.(MB)

Congress should stop sitting on oil reform measures

May 26, 2008

P16.7B VAT windfall on oil should be used to buy back Petron – Bayan Muna
House Speaker Prospero Nograles’ proposal to tap the P16.7 billion VAT windfall on skyrocketing oil prices to provide relief for consumers has found support from Bayan Muna Rep. Teddy Casino , who proposed that the money be used to get back government control of former state-owned Petron Corp.
“Speaker Nograles’ proposal is well intentioned but would only result in a one-shot-deal subsidy for consumers. That money will be better used to fund a buy back of Petron, thereby giving the government enough market leverage to lower domestic oil prices and check the monopolistic and abusive practices of foreign oil firms,” said Casiño.
A subsidiary of London-based investment firm, Ashmore, recently made a $550 million offer for Aramco’s stake in Petron Corp. The Saudi-government owned company bought its Petron stake for about $530 million in 1994.
“The fact that Aramco’s stake is up for sale gives us a golden opportunity to correct the mistake of selling Petron. In fact, only a part of the P16.7 billion is needed to get back a majority control of Petron. All government needs is to re-acquire another 11% of Petron’s shares on top of the PNOC’s 40% stake to gain the majority in the oil firm,” said Casiño.
“A level-headed government should easily see that oil price hikes can be effectively be put in check if the state itself has market leverage. This is one of the long term solutions to our problems. Petron should be run as a public utility and a pro-Filipino company,” he stressed.
Casino’s proposal is embodied in House Bill 3031 or An Act Renationalizing Petron Corporation which has been pending with the House Committee on Government Enterprises and Privatization headed by Camarines Sur Rep. Felix Alfelor Jr. since November 13, 2007.
Saying that the House leadership has largely been silent on oil companies having raised pump prices 12 times since March this year, the militant party list bloc is also pushing for a bill to exempt the sale or importation of petroleum products and raw materials used in the manufacture of the same from the regressive VAT. HB 3442 is pending with the Committee on Ways And Means since May 2, 2008.
House sitting on vital oil legislation?
“We also wonder why the Energy committee is sitting on two major legislative proposals that aim to provide the people – including exporters, power distributors, housewives and transport drivers and operators – relief from rising oil prices,” said Casiño.
The two measures are: House Bill 3029 An Act Regulating the Downstream Petroleum Industry and for Other Related Purposes and House Bill 3030 An Act Instituting Centralized Procurement of Petroleum in the Country.
“All these measures are being ignored by the bigwigs of the House. The people expect Congress to be relevant to the times and act on legislation that aim to bring immediate relief from the weekly oil price hikes based on speculation in the world market,” Casiño stressed. #

Editorial Cartoon: Freeing the Beast

May 26, 2008

Pinalaya na si Erap.  Pinalaya na si Manero.  Pinalaya na si Jalosjos.  Wala nang balita kay Smith.  Tapos ngayon, papalayain na rin ang mga malalaking kmpanya ng langis.

On Zero Oil Tariff Cut: Relieve Consumers, Not Oil Firms

May 26, 2008

Written by IBON Media Independent think-tank IBON Foundation criticizes the Department of Energy and Malacañang for passing the zero oil tariff cut, saying that reduced tariffs in the last three months has resulted in even higher prices of oil products. Since the oil tariff was reduced from 3% to 2% in February and 2% to 1% in May, gasoline and diesel prices have increased 11 times to a total of P7.50 per liter. There were two rollbacks of P1.50 per liter for diesel and P1.00 for gasoline presumably brought about by the tariff cut. But since then, pump prices have actually increased by a net of P6 per liter.

The DOE announced yesterday that starting June, imported oil products will enjoy zero tariff cut. It admitted though that the scrapping of oil tariffs would result only in a reduction of P0.50 per liter in pump prices. But local oil firms recently announced that they are looking at a P1.50 per liter increase in diesel prices and P1.00 per liter for gasoline following news world oil prices had hit US$135 per barrel, debunking government argument that the oil tariff cut will bring down oil prices.

Moreover, by choosing to remove tariffs on oil imports, government protects the interests of the oil firms at the expense of potential revenues that should be used to fund vital social services.

IBON maintains that the removal of the VAT on oil is still a more effective solution to the high oil prices. Removing the VAT on oil will immediately bring down pump prices by as much as P5 per liter and directly relieve the consumers, unlike the oil tariff cut that only relieves oil companies from paying import duties. (end)

Study Other Revenue Measures Outside VAT, Gov’t Urged

May 26, 2008

Written by IBON Media Malacanang consistently refuses to repeal the reformed value-added tax (RVAT) on oil and power saying that it will harm the country’s revenues. But according to independent think-tank IBON Foundation, there are measures that government can implement which are less burdensome and can generate more revenues than the RVAT. These measures include improving revenue performance, which according to the National Tax Research Center, could earn the government an average of P57 billion annually in uncollected VAT on items other than petroleum products and P82 billion in uncollected corporate taxes as of 2006.

If government increases its tax collection efforts from 14% of the gross domestic product to 16%, this can produce at least P94 billion in a year. These revenues are more than enough to cover the revenue losses from the removal of VAT on oil and power.

Removing the RVAT on oil and power will also help mitigate the significant supply-side pressure on inflation due to high global oil prices and may decrease the inflation rate by 0.5-0.8 percentage points, especially since global oil prices are expected to continue increasing at least through 2008, with improvement only in 2009.

Raising revenues through a regressive VAT is convenient only for the government, which amid the spiraling cost of basic goods and services, should implement revenue-generation measures that do not unduly burden the poor Filipino majority– which is unfortunately what the regressive VAT does. (end)

Oil tariff at zero won’t stem prices

May 24, 2008

Teves says: No stopping increases

BY REGINA BENGCO

FINANCE Secretary Margarito Teves yesterday said the tariff on oil imports would be brought down to zero on June 1 following the rise of global oil price to $135 per barrel on Thursday.

Don’t expect any immediate lowering of prices, he said.

The zero tariff will not immediately result in lower pump prices because some companies still have recoveries, he said.

Eventually, he said, prices would have to increase.

Oil was trading at $132 per barrel yesterday.

“Kasi tumataas din ang presyo, wala tayong magagawa doon. Ang kapalit niyan, we’ll find a way of re-channelling whatever additional resources that the government has collected back to the sectors that were affected. Yun ang plano,” he said.

Oil companies are expected to raise prices again this weekend. Since the start of the year, the oil firms have raised prices nine times, bringing the price of gasoline to a record high of at least P51 a liter.

Oil firms have said they are eyeing a recovery amount of P7 a liter to stop losses due to skyrocketing world crude prices.

The energy department earlier this week said price triggers for the zero tariff were breached during the first two weeks of the month.

The current tariff is 1 percent. Last January, Malacañang effected a 1 percentage point reduction (to 2 percent from 3 percent) on the tariff on oil as an alternative to calls for suspending the 12 percent value-added tax on oil or scrapping the oil deregulation law.

The Palace has said suspending the VAT would result in a P60 billion revenue loss and lower credit ratings.

Teves said the current value of the peso (P43.42 to a dollar) is still within the P42-P45 peg for the 2008 national budget.

He said the deterioration of the peso to more than P43 to the dollar helps the exporters and the overseas Filipino workers but government will have to pay more interest for its debts.

He said the lower peso value also improves Customs collections because taxes are collected based on the peso equivalent of the imported item.

He said what government is watching out for is the effect of the peso on the gross domestic product because a lower GDP would affect the overall revenue collection.

He said deterioration would initially be inflationary and would result in higher tax collection.

“We will know in the next semester, because it may already have an effect on our economy. But we don’t know to what extent yet,” he said.

But he said government has to look at the assumptions associated with the economic projections because both the inflation and interest rates are now higher than the assumption.

The inflation rate was 8.3 percent as of April.(Malaya)

News- 21May08: Solons File Petition for Certiorari vs JMSU

May 21, 2008

Case Brief
Title of the Case:
Petition for Certiorari and Prohibition with Application for Temporary Restraining Order and/or Preliminary Injunction
Petitioners:
Bayan Muna Reps. Satur C. Ocampo and Teodoro A. Casiño
Anakpawis Rep. Crispin B. Beltran
Gabriela Women’s Reps. Liza L. Maza and Luzviminda C. Ilagan
Quezon Rep. Lorenzo R. Tañada III
Bukidnon Rep. Teofisto L. Guingona III
Respondents:
President Gloria Macapagal- Arroyo
Executive Secretary Eduardo R. Ermita
Secretary of the Department of Foreign Affairs
Secretary of the Department of Energy
Philippine National Oil Company
Philippine National Oil Company Exploration Corporation,

STATEMENT OF THE CASE

1. This case is about the following:
(a) State’s ownership of its natural resources (Article XII, Section 2 (1), 1987 Philippine Constitution) ;
(b) That the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State (Article XII, Section 2 (1), 1987 Philippine Constitution) ;
(c) That the State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements only with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by Filipino citizens State (Article XII, Section 2 (1), 1987 Philippine Constitution) ;
(d) That the allowable and permissible undertakings for the exploration, development, and utilization of natural resources, including petroleum and other mineral oils, are only those that are clearly and categorically expressed under Article XII, Section 2, of the 1987 Philippine Constitution.
2. The agreement entitled “A Tripartite Agreement for Joint Marine Seismic Undertaking in the Agreement Area in the South China Sea” (Tripartite Agreement) by and among Philippine National Oil Company, China National Offshore Oil Corporation, and Vietnam Oil and Gas Corporation is unconstitutional and void on the following grounds (please see discussion on page 3, number 7):
(a) The Tripartite Agreement itself, its execution, and its continued implementation are unconstitutional as they allow the large-scale exploration of petroleum and other mineral oils by corporations wholly-owned by foreign states in clear violation of Article XII, Section 2, paragraph 1, of the 1987 Philippine Constitution.
(b) The Tripartite Agreement itself, its execution, and its continued implementation are unconstitutional because they are not covered and sanctioned by any of the allowable and permissible undertakings under Article XII, Section 2, of the 1987 Philippine Constitution.
3. Public respondents have committed grave abuse of discretion amounting to lack or excess of jurisdiction, to wit: –
(a) Pres. Gloria Macapagal-Arroyo and Executive Secretary Eduardo Ermita for authorizing, permitting, and tolerating, both expressly and impliedly, the execution, signing, and continued implementation of the Tripartite Agreement in clear violation of Article XII, Section 2 (1), of the 1987 Philippine Constitution;
(b) Secretary of the Department of Foreign Affairs for participating in the planning, negotiations, and preparations that led to the eventual execution, signing, and approval of the unconstitutional and void Tripartite Agreement in clear violation of Article XII, Section 2 (1), of the 1987 Philippine Constitution;
(c) Secretary of the Department of Energy for issuing the permit to Philippine National Oil Company – Exploration Corporation (PNOC-EC), which permit constituted the Philippine Government’s approval of the Tripartite Agreement in clear violation of Article XII, Section 2 (1), of the 1987 Philippine Constitution;
(d) Philippine National Oil Company (PNOC) for entering into a Tripartite Agreement with corporations wholly-owned by foreign States for large-scale exploration of petroleum and other mineral oils within Philippine-owned and claimed territory, and in the continued implementation thereof, in clear violation of Article XII, Section 2 (1), of the 1987 Philippine Constitution;
(e) Philippine National Oil Company – Exploration Corporation (PNOC-EC) for becoming, and allowing itself to be, an assignee of the rights and obligations of the PNOC under the unconstitutional and void Tripartite Agreement in clear violation of Article XII, Section 2 (1), of the 1987 Philippine Constitution;
4. CNOOC and PetroVietnam are state-owned companies of China and Vietnam , respectively, and are representing the governments of the said States in the Tripartite Agreement. PNOC is the representative of the Philippine Government in the Tripartite Agreement.
Given the extent and coverage of the Tripartite Agreement, and the factual nature of the undertaking, which is the collection and processing of 2D and/or 3D seismic lines within the agreement area for a joint exploration of petroleum resource potential by the Parties, the State compromises and bargains away its national economy and patrimony, national sovereignty, territorial integrity, and national interest.
Specifically, the Philippines sells out to the other Parties to the Tripartite Agreement the following:
(a) Our potential petroleum resource within the agreement area;
(b) Our clear and undisputed territories, archipelagic waters, territorial sea, and exclusive economic zone covered by and within the agreement area;
(c) Our claimed and occupied land territories, archipelagic waters, territorial sea, and exclusive economic zone covered by and within the agreement area; and
(d) Our claimed land territories, archipelagic waters, territorial sea, and exclusive economic zone covered by and within the agreement area.
The State likewise undermines, compromises, and weakens our claim over the disputed Spratly Group of Islands by virtue of the execution and the continued implementation of the Tripartite Agreement.
5. Prayer of the Petitioners: That the Honorable Supreme Court issue a judgment:
a. Declaring the Tripartite Agreement as unconstitutional and void;
b. Annulling the “A Tripartite Agreement for Joint Marine Seismic Undertaking in the Agreement Area in the South China Sea ” by and among Philippine National Oil Company, China National Offshore Oil Corporation, and Vietnam Oil and Gas Corporation; and
c. Enjoining the public respondents from further implementation of the Tripartite Agreement;
6. A Temporary Restraining Order and/or Preliminary Injunction is likewise prayed for on the following grounds:
a. Grave and irreparable injury results to Petitioners, as legislators, taxpayers, and citizens of the Republic of the Philippines , who are directly affected by the continued implementation of the Tripartite Agreement;
b. Grave and irreparable injury results to the Petitioners and to the whole country, as the State is not be able to protect and preserve, and in fact sells out to foreign countries, its sovereignty, territory, and interest by the continued implementation of the Tripartite Agreement;
c. Grave and irreparable injury results to the Petitioners, as taxpayers, with the continuous illegal disbursement of public funds in the continued implementation of the Tripartite Agreement;
d. Grave and irreparable injury results as the continued implementation of the Tripartite Agreement causes the national economy and patrimony, national sovereignty, territorial integrity, and national interest to be compromised and bargained away unashamedly;
e. The continued implementation of the Tripartite Agreement during the pendency of the proceedings of this Petition shall work grave and irreparable injury and injustice to the Petitioners and to the whole country; and
f. There is no other plain, speedy, and adequate remedy to address these pervasive injuries to the Petitioners and to the country before this Petition could be heard by the Honorable Court.
7. Discussion of the grounds that the Tripartite Agreement is unconstitutional and void:
(a) The Tripartite Agreement itself, its execution, and its continued implementation are unconstitutional as they allow the large-scale exploration of petroleum and other mineral oils by corporations wholly-owned by foreign states in clear violation of Article XII, Section 2, paragraph 1, of the 1987 Philippine Constitution:
(i) The Tripartite Agreement is for exploration of petroleum and other mineral oils as its purpose is the collection and processing of 2D and/or 3D seismic lines through seismic work, which is already part of and within the exploration process of such natural resources:
(a) Article 4 (4.1) of the Tripartite Agreement clearly and specifically established that such “joint research of petroleum resource potential” shall be undertaken and carried out through seismic work;
(b) While the Tripartite Agreement, under its fifth whereas clause, expressly provides that the joint research of petroleum resource potential is a mere “pre-exploratory activity”, its Article 4.1, however, expressly provides the manner of such joint research “that certain amount of 2D and/or 3D seismic lines shall be collected and processed and certain amount of existing 2D seismic lines shall be reprocessed within the Agreement Term;”
(c) The collection and processing of 2D and/or 3D seismic lines constitute exploratory activity, and not a mere pre-exploratory activity. As far as the oil and gas industry is concerned, seismic work, survey, or mapping is considered an integral part of the exploration process of petroleum and other mineral oils, and not a mere pre-exploration activity. Every available literature on the matter states that seismic work, survey, or mapping is an exploration method, hence, part of the exploration process;
(d) It can be gleaned from the facts and circumstances leading to the conclusion of the execution and signing of the Tripartite Agreement that the use of the phrase “pre-exploratory activity” is a mere afterthought on the part of the Parties thereto in order to circumvent, or get around of, any constitutional issue or controversy on the matter. By using the phrase “pre-exploratory activity,” the Parties thereto simply want to give the Tripartite Agreement a semblance or an appearance of legality or constitutionality;
(ii) The Tripartite Agreement itself, its execution, and its continued implementation are a clear violation of Article XII, Section 2, paragraph 1, of the 1987 Philippine Constitution.
(e) Article XII, Section 2 (1) (1987 Philippine Constitution) . All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporation or associations at least sixty per centum of whose capital is owned by such citizens. xxx” (Emphasis supplied)
(f) The fact that the Tripartite Agreement involves corporations CNOOC and PetroVietnam, which are wholly-owned by foreign countries China and Vietnam, respectively, (as the CNOOC and PetroVietnam are state-owned national oil companies of China and Vietnam, respectively) in the joint venture, joint undertaking, or joint partnership with the PNOC in the large-scale exploration of our petroleum and other mineral oils, the Tripartite Agreement clearly and unequivocally violates Article XII, Section 2, paragraph 1, of the 1987 Philippine Constitution, hence it is unconstitutional and void;
(g) The Tripartite Agreement’s violation of the said provision is so obvious and evident that the Tripartite Agreement itself, its execution, and its continued implementation smack of downright constitutional mockery;
(h) The Philippines has no full control and supervision over the exploration of our petroleum and other mineral oils under the Tripartite Agreement. How could the State (Philippines) assert such full control and supervision under the Tripartite Agreement when the other co-equal Parties thereto are aliens – being corporations wholly-owned by foreign countries – and whose authority to enter into such agreement, and their continued participation thereto, was, is, and will always be subject to the concurrence and approval of the governments of the said foreign countries, namely China and Vietnam?;
(b) The Tripartite Agreement itself, its execution, and its continued implementation are unconstitutional because they are not covered and sanctioned by any of the allowable and permissible undertakings under Article XII, Section 2, of the 1987 Philippine Constitution.
(i) Article XII, Section 2 (1987 Philippine Constitution) provides the only ways by which our natural resources may be explored, developed, and utilized, to wit:
(a) The State may undertake these exploration, development, and utilization activities through either of the following:
(i) By itself directly and solely, or
(ii) By (i) co-production; (ii) joint venture; or (iii) production sharing agreements with Filipino citizens or corporations, at least 60 percent of the capital of which is owned by such citizens.
(b) Small-scale utilization of natural resources may be allowed by law in favor of Filipino citizens.
(c) For large-scale exploration, development, and utilization of minerals, petroleum and other mineral oils, the President may enter into “agreements with foreign-owned corporations involving either technical or financial assistance according to the general terms and conditions provided by law x x x.”
(ii) The Tripartite Agreement is not one of the above-mentioned allowable and permissible agreements under the 1987 Philippine Constitution.
(iii)The Tripartite Agreement patently and grossly set aside, disregarded, and ignored fundamental State Policies embodied in the 1987 Philippine Constitution resulting to mockery thereof to the detriment and prejudice of our national sovereignty, territorial integrity, and national interest:
Article II. Section 7. The State shall pursue an independent foreign policy. In its relations with other states, the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the right to self-determination.
Section 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest.” (Emphasis supplied)
The acts of the public respondents in allowing and authorizing the execution, signing, and continued implementation of the Tripartite Agreement constitute a treachery of the highest order, a betrayal of paramount proportions.#

Vincent Michael L. Borneo
Political Affairs Officer
(Media and Public Relations)
Office of BAYAN MUNA Rep. Teddy A. Casiño
Rm. 508, North Wing Bldg.,
House of Representatives, Quezon City
Telefax no: 931-5911

Tañon Strait ‘still open’ to other oil explorers

May 17, 2008

CEBU CITY — The reported pullout of an oil exploration firm from Tañon Strait will not mean a victory for environmental advocates.

Department of Energy (DOE)-Visayas Director Antonio Labios on Friday said that Tañon Strait will be opened to other interested oil and gas explorers once Japan Oil Exploration Corp. (Japex) formalizes it withdrawal.

Arroyo Watch: Sun.Star blog on President Arroyo

Labios said Japex must officially inform the DOE-Visayas if they will officially terminate the contract because the foreign company has obligations to fulfill based on the agreement on oil and gas explorations.

“If Japex will stop, the area will be opened for another interested group. But Japex cannot do it immediately because they have to settle first their commitment to the Philippine Government,” Labios said.

The Capitol is also waiting for an official report from the DOE-Visayas on the development.

Capitol consultant on information and revenue generation Rory John Sepulveda said they expect a report from the agency next week since it regularly updates Governor Gwendolyn Garcia on the project.

However, Vince Cinches of the Fisherfolk Development Center (Fidec) said that the decision of Japex to pullout from Tañon Strait is a victory for all groups who are against the “damaging” exploration.

The Save Tañon Strait Citizen’s Movement said they will pursue the twin cases they have filed before the Supreme Court (SC) for the welfare of the dolphins and the fisherfolk.

Cinches said that they are going to make officials from the DOE, Department of Environment and Natural Resources (DENR) and the Bureau of Fisheries and Aquatic Resources (Bfar) accountable for the damage to the environment.

He said they will soon meet with the fisherfolk from Toledo City and the towns of Pinamungajan and Aloguinsan to assess the damage due to the exploration by Japex.

Environmental scorecards will be distributed to the different municipalities in Cebu. The cards will contain questions on environmental issues and concerns.

“These scorecards will be a great way for us to find out of their local government officials have done their part in taking care of our environment,” saw environmental lawyer Gloria Estenzo-Ramos in a forum Friday at the University of San Jose-Recoletos.

Cinches said the Bfar already announced the availability of the monitoring result of the Multi-Sectoral Monitoring Team, which is composed of government representatives and some private individuals.

“We requested from Bfar for a copy of that report. But for two months already, we received no reply,” Cinches said.

Cinches alleged that Bfar included Dr. Ben Malayang, president of Siliman University, as a member of the team. But this was denied by Malayang.

“The government officials who connived in the destruction of Tañon Strait should answer for their unconstitutional acts,” Cinches said. (SunStarCebu)

Prices seen to rise faster than ever this year

May 17, 2008

Prices of goods and services are expected to grow at their fastest pace this year across the world as a result of higher food prices and costlier oil, a United Nations report said.

In its World Economic Situation and Prospects 2008, the UN projected that the Philippines’ inflation rate is likely to grow 3.5 percent this year or within the government’s target of between 3 percent and 5 percent.

The report said inflationary pressures stem from rising international food prices, as food items have a high weight in the consumer price index (CPI).

In the Philippines, food products make up 50 percent of the basket for the CPI. In Indonesia, agricultural products and processed food account for about 42 percent of the basket.

In April, the country’s inflation rate rose 8.3 percent, the fastest pace since May 2005. Inflation for the first four months reached 6.2 percent, which was significantly above the 3-percent to 5-percent target range for 2008.

“The rising prices of rice nationwide and the general price mark-ups in other food items, such as corn, canned fish and select fresh fish species, meat, cooking oil and select spices and seasonings were responsible for the 2-percent increment in the national month-on-month inflation rate in April from 0.9 percent in March,” the Philippines’ National Statistical Office said recently.

The UN report also projected that the country’s gross domestic product (GDP) may rise 6.1 percent, lower than the government’s target of between 6.3 percent and 7 percent this year. GDP is the total value of goods and services produced by a country in a year.

In 2007, the Philippine economy, as measured by GDP, grew 7.3 percent, the highest growth in 30 years.

The UN report said Indonesia’s economy will grow 6 percent; Malaysia, 5.8 percent; Thailand, 4.8 percent; and Singapore, 7.2 percent. (ManilaTimes)

Transport strikers are caught between two forces, says Cagayan de Oro Prelate

May 13, 2008

CAGAYAN DE ORO CITY, May 13, 2008—Cagayan de Oro archbishop Antonio Ledesma, SJ, said that public utility drivers are caught between two forces: the rising cost of petroleum products and the equally soaring price of basic commodities, especially rice.

The local Solidarity of Transport Alliance of Region X (STAREX), a transport group in this city and cause-oriented groups including Bagong Alyansang Makabayan and various sectoral groups led the transport strike to oppose the unabated increase in petroleum prices.

Among the demands was for the Senate to scrap the controversial oil deregulation law and the nationalization of local oil industry.

While clamoring for 25% wage increase, the strikers also called for the immediate ouster of President Gloria Macapagal-Arroyo.

In an interviewed with CBCPNews, Archbishop Ledesma said the drivers are simply exercising their right to protest and seek redress of grievances.

“Government officials should confront the issues on the increase in prices of petroleum products and prime commodities and with this I would like to sympathize with them,” the prelate said.

“Dili kaayo mi caught sa rice kai ang bugas masulbad ra samtang ang problema sa oil lisud kay kani nakatapat sa oil deregulation law,” (We are not that caught with the rice problem since it can be resolved, while the oil increase is a difficult crusade since it is associated with the oil deregulation law.) said Amando Naul, Secretary General of STAREX.

Public transportation in Cagayan de Oro City was paralyzed by 97% in the city-wide mass action that began at 4:00 A.M. until 3:00 P.M. Monday.

Naul said his group expects to talk with Cagayan de Oro Archbishop Antonio Ledesma to discuss the issues affecting them and the community.

(CBCPNews)

West Visayas govs seek cut or scrapping of taxes on oil

May 13, 2008

The governors made the call as Monday’s transport strike was declared a success in the provinces of Capiz, Aklan and Negros Occidental.

The strike in Iloilo was set to end midnight Tuesday.

Capiz Governor Victor Tanco called for the suspension of the expanded value added tax on petroleum products, a move he said would bring down the cost of fuel and give relief to the transport sector.

Governor Niel Tupas Sr. of Iloilo said he also favored the removal or suspension of the VAT on oil products because of the burden of high oil prices not only on the transport sector but also on consumers.

Antique Governor Salvacion Zaldivar-Perez, chair of the Regional Development Council in Western Visayas, said she favored a reduction, but not the removal, of the tax on oil products.

“The government also needs revenues so we should compromise,” she said.

Governor Isidro Zayco of Negros Occidental also backed the reduction of taxes to lower oil prices and expressed hope the government would reach an agreement with the transport groups.

“We are losing much because of transport strikes,” Perez said.

Tupas said Monday’s strike also affected businesses in Iloilo, the regional center, because few people were able to go to the city.

Zayco said the two-day strike in Negros Occidental significantly affected economic activity in the region because consumers could not go to shops and stores.

Most jeeps and buses and other public utility vehicles kept off the streets in Bacolod City Tuesday, the second day of the strike.

Absences were noted in government and private offices throughout the city.

Roberto Montelibano, Metro Bacolod Chamber of Commerce and Industry president, said the strike inconvenienced many people but business went on as usual.

In Aklan, drivers of jeepneys, tricycles and small buses stayed off their routes for the second day.

(PDI)

Gov’t waives right to buy

May 12, 2008

THE Philippine National Oil Co. yesterday decided to waive its right of first refusal to the 40 percent stake in Petron which Saudi Aramco is selling to the London-based Ashmore Group for $550 million.

“We based our decision on a number of factors, including the fact that the purchase of these shares by the government runs contrary to our policy of privatizing government stakes in corporations and letting the private sector run commercial enterprises,” Energy Secretary Angelo Reyes said after a meeting of the PNOC board.

PNOC, which holds a 40 stake in Petron after the latter’s privatization in 1994, also opted not to transfer the right to buy the Aramco block to a third party.

Reyes said last week that Morgan Stanley had approached PNOC with an offer to buy the stake.

Last week, JG Summit Petrochemical Corp., owned by the Gokongwei family, said it was offering about P24.5 billion ($575 million) for PNOC’s stake in Petron.

PNOC officials said no decision had yet been taken.

PNOC said the decision not to exercise its right followed a recommendation made by its financial advisors, Development Bank of the Philippines and ING.

“We were also aware that exercising the right of first offer and the subsequent tender offer could cost Philippine taxpayers some $825 million at a time when the government has many other priorities including the further development of our agriculture sector to support food security and investment in modern infrastructure to ensure the competitiveness of our economy,” he said.

Reynaldo David, DBP president, said Ashmore will be an acceptable partner as it has expressed intention to grow Petron’s business on all fronts, both strategic and financial.

David said Aramco has offered a supply agreement to Ashmore that guarantees a one-year oil supply for Petron.

Upon Aramco’s entry into Petron, it signed a 10-year supply contract covering 90 percent of the latter’s requirement.

The contract, which was scheduled to run until 2014, would be terminated upon the sale of Aramco’s stake to Ashmore.

David said DBP looked into the offer of Morgan Stanley as well as those of the Thai firm PTT Ltd. and the Gaisano family of Cebu.

Petron has assets amounting to P104.5 billion, with borrowings of P46.6 billion. It supplies 40 percent of country’s refined oil product requirement, with a refinery rated at a capacity of 180,000 barrel per day.

The Ashmore Group is listed on the London Stock Exchange. It has assets $36.5 billion.

Sen. Mar Roxas said PNOC should make public the deliberations which led to its decision.

Roxas, chairman of the Senate committee on trade and commerce, questioned why PNOC deliberated on the deal only on the last day of the two-month period within which to decide.

“The government knew that this sale was forthcoming yet there was no clear design on how to seize this as an opportunity to advance the national interest particularly at this time of sky-high oil prices,” he said.

Roxas raised the issue before the announcement to waive was made.

Roxas said the sale of the 40 percent stake of Aramco in Petron “is not just a simple commercial transaction” as it involves the public interest at a time when the price of crude oil is going off the roof.

“This pertains to a strategically crucial product, oil, and to a company that owns 40 percent market share in the domestic trade of oil products,” he said.

“They may have very good reasons not to exercise this option, but to date we don’t know what these are. And if these ‘good reasons’ don’t exist, we ought to instead exercise this right so we can place this key asset in friendly hands,” he said.

(Malaya)

Transport strike paralyzes key Mindanao cities

May 12, 2008

MALAYBALAY CITY (MindaNews/12 May) — Between 80 and 95 percent of public vehicles in major cities in Mindanao ground to a halt today after various groups in the island joined a nationwide transport strike to protest the continuing increases in the prices of petroleum products and rice.

The strike paralyzed public transport in the cities of Davao, Cagayan de Oro, Iligan and Kidapawan.

In Davao City, organizers claimed 95 percent of public vehicles joined the strike.

Traffic Management Center chief Celso Gempesaw said that as of 3:30 p.m. 85 percent of taxis and public utility jeepneys had stopped plying their routes.

City hall employees were allowed to go home early to prevent them from being stranded, City Administrator Wendel Avisado said.

He added only a few people were transacting business at the city hall and that Mayor Rodrigo Duterte decided to cut short the workday to save on power costs.

Classes in Ateneo de Davao were suspended as many faculty members and students were unable to report. Only those who have private cars came to the school.

Court hearings were also postponed.

“We have anticipated such support from the people of Davao City and we are positive that the strike will be successful especially with the support that has been coming from the drivers themselves,” Jeppie Ramada, secretary general of Bagong Alyansang Makabayan (Bayan)-Southern Mindanao, said.

In Cagayan de Oro, public transport was 85 to 90-percent paralyzed, although private vehicles were still running.

In Iligan, only pedicabs (non-motorized tricycles), the tartanilya (calesa or horse-drawn carts), motorbikes and a few private cars could be seen on the streets. Drivers and civil society groups held a march-rally in the morning.

Meanwhile in Kidapawan City, capital of North Cotabato, the strike paralyzed at least 80 percent of public transport. There are some 2,000 tricycles and 500 public multi-cab, vans and jeeps in the city.

The strike in Kidapawan started 6:30 a.m. and ended 3 p.m. today. A downpour did not prevent the drivers and operators from marching in the streets to drumbeat their issues.

Members of the Federation of the Kidapawan Integrated Tricycle Association (KITA), the biggest group of drivers and operators here, comprised the bulk of the strikers, Bayan provincial spokesperson Bebiano Gabo said.

Gabo, citing studies from a research organization, said that if the transport sector all over the country would not buy any petroleum products even for just an hour, the oil companies would lose about P700 million.

“This is why this protest action has sent a strong signal to big oil companies in the country,” he stressed.

KITA joined the protest action despite the approval last week of an increase in tricycle fare.

KITA president Victorino Carbonell said the fare increase was insignificant because the prices of oil products have increased by almost two pesos since.

“What frustrated us so much is the fact that the fare increases happen only every three to four years, but oil price increases happen almost every week,” he lamented.

Gasoline prices last year increased 18 times and that of liquefied petroleum gas 13 times.  “This year, oil companies have set to add 1 peso per week starting May to July,” Bayan Mindanao said in a statement.

“The increases have cut into the drivers’ daily income.  According to Transmission Southern Mindanao, drivers lose more than 200 pesos a day from their income due to the increase.  Tricycle drivers in General Santos lose nearly half of their income as they have to shell out 300 pesos for gasoline per day, in which they end up taking home 80 to 100 pesos for their income,” the statement added.

Bayan said the repeal of the Oil Deregulation Law would be an immediate remedy to the oil price hike. It also called for the scrapping of the 12-percent Reformed Value Added Tax as this would reduce five pesos from the prices of petroleum. (With reports from MindaNews in Davao City, Cagayan de Oro City, Kidapawan City and Iligan City)


Editorial Cartoon: Huwarang Ina Awardee

May 11, 2008

Huwad Na Ina

Government remiss in duty in not getting back control of Petron – Bayan Muna

May 10, 2008

BAYAN MUNA Rep. Teddy Casiño today bewailed the government’s refusal to “grab the golden opportunity to wrest back control of Petron” by refusing to exercise its right to buy even a portion of Aramco’s 40 percent stake in Petron, which is being sold to London-based investment group Ashmore.

“The government has and should maximize its right of first refusal in this case. In the face of rampaging manipulation of oil prices in the world and local markets, it would be wise, nay brilliant for government to get back a majority stake in Petron so that it can effectively control pump prices and give some relief to the transport, manufacturing, service and energy sectors that are largely dependent on oil,” Rep. Casiño said.

Aramco Overseas Co. has agreed to sell its 40-percent stake in Petron to the Ashmore group’s SEA Refinery Holdings after a 14-year partnership with the Philippine government. PNOC was given 60 days, until May 12, to match the offer.


“The matter is about political will. Government can easily shell out P4 or P5 billion to increase its stake in the country’s biggest oil refiner and retailer by a mere 11 percent to have an absolute majority of 51 percent. With majority control on Petron that has the biggest number of gas stations nationwide, government will gain major market leverage and can temper pump prices,” Casiño said.

Saudi Aramco is selling its 40% stake to the London-based Ashmore Group for US$550 million [approximately P23 billion]. The Gokongwei family offered P24.65 billion on Wednesday to take the government’s Petron stake, which it holds through Philippine National Oil Co. (PNOC).

“This government will be better off by expanding its stake in Petron. The so-called budget and time constraints can be outdone by fierce government political will to help provide tangible relief to the people from predatory pricing and ensuring revenues from Petron in the long term. Government must immediately act and corner 11 percent more in Petron,” Casiño stressed. #