“You will be charged for possible profiteering,” local governments in Eastern Visayas warn those who are taking advantage of the oil crisis the country is facing.
Aside from the government, consumer groups are up in arms against profiteers, as they believe those who are taking advantage of the situation should also be charged with economic sabotage.
In a region where the average poverty rate has been ranked as one of the highest in the Philippines, the sudden increase in oil prices amid the ongoing war in the Middle East have sent shockwaves among various economic sectors.
Prior to the expected “big-time” oil price hike last March 10, diesel prices in several gasoline stations in Leyte province surged as high as P100 per liter, far exceeding typical pump prices in other parts of the country.
Online discussions among residents describe diesel prices rising rapidly within hours from around P54 to as high as P80 or even P100 per liter in certain independent stations.
The increases appear to be significantly higher than projected adjustments from oil companies and the government.
Earlier forecasts suggested diesel could reach around P80 to P100 per liter, depending on global oil market movements.
Lower margins
Leyte Board Member Wilson Uy addressed the issue in a statement explaining why independent or small gasoline stations were among the first to raise prices.
Uy – who is also the owner of gasoline chain Nitrofuel Corporation – said these smaller stations typically operate with less financial buffer than major oil companies.
In his explanation, independent retailers often buy fuel at higher and more volatile wholesale prices and must quickly adjust their pump prices to avoid losses.
Uy said some smaller operators “source fuel through multiple suppliers and intermediaries,” which increases the cost of each delivery.
As global prices rise, these retailers may be forced to raise prices earlier than larger companies such as Shell or Petron, which have direct supply contracts and larger inventories.
He also noted that independent stations cannot sustain prolonged selling at older prices once new shipments arrive at higher cost.
Unfortunately, most of these independent gasoline stations are located in places where the big players are usually absent, places serving the needs of farmers.
Inexplicable
However, critics argue that not all increases can be explained by supply costs alone, particularly when some stations raise prices even before their lower-priced inventory runs out.
Moreover, the sudden rise in oil prices did not sit well with certain sectors of the local economy.
Particularly hardest-hit, aside from the public transportation sectors, are small farmers who find themselves unable to cope with the astronomically high prices of fuel that they use in their operations.
It’s no secret that the agriculture sector has been operating at almost a loss due to rampant importation and government neglect.
The sudden spike in prices of oil products could leave them unable to sustain their livelihoods, triggering another potential shortage – this time, of staple food products such as rice and corn.
Price monitoring
Meanwhile, authorities have begun monitoring pump prices following reports of unusually large increases.
Local governments in parts of Eastern Visayas have reminded gasoline stations to strictly follow government-authorized fuel pricing advisories.
Officials warned that businesses imposing price hikes beyond officially announced adjustments could face penalties or investigation for possible profiteering.
Regulators stress that while pump prices can vary due to logistics and supply costs, increases must still be consistent with guidance from the Department of Energy (DOE).
Questions
However, the disparity between prices in Leyte and those in Luzon has also raised questions about supply chains and market oversight.
In many areas of Luzon, diesel prices have remained significantly lower, generally ranging between the P60 and P70 per liter before the big-time oil hike on March 10. (As of the writing of this article, oil prices in gasoline stations in Luzon now average P70 to P90 per liter.)
Analysts say transportation costs, shipping logistics, and limited competition in remote areas may partly explain the difference.
Hoarders
The unusually sharp increases in certain stations have also fueled suspicions that some operators may be exploiting the situation.
Recently, photos of multiple empty barrels allegedly being filled with diesel in a Petron gasoline station in Barangay Apitong, Tacloban City sparked allegations of businesses hoarding the supply and selling it in time when oil prices are at an all-time high.
While these allegations are yet to be confirmed, many residents believe that the sudden spike has immediate consequences.
Diesel prices directly affect the cost of transportation, food distribution, and public fares.
Transport groups warn that if the trend continues, fare increases could follow, further burdening consumers already struggling with rising living costs.
Action needed
With the government now monitoring the situation, consumer groups are calling for stronger oversight to ensure that price increases reflect legitimate supply costs, and not opportunistic profiteering during a time of crisis.
These groups argue that simply “warning” possible profiteers is not enough to arrest this trend.
If the government is serious in addressing the situation, they should start by filing charges against businesses who are raking in profits at the expense of the local economy, Saving our Soils (SOS) Movement, an enviro-agricultural advocacy group, said, adding that they are preparing criminal charges against gasoline stations brazenly taking advantage of the oil crisis.
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