CCCI's call for oil boycott

By Chris Malazarte
Saturday, December 19, 2009

The Cebu Chamber of Commerce and Industry (CCCI) has spoken. And they have spoken amply well -- bravely and fearlessly. The call of CCCI to boycott the oil firms exemplifies its firm leadership and sense of propriety as an organization. Truly, CCCI is the voice and conscience of the business community advocating openly against surreptitious business practices that does not only hurt its enterprising members but the welfare of Cebu's consuming public and the economy in general.

Lame. Just insanely lame the reasons propounded by these big local oil companies. Accordingly, Cebu deserves to pay more at the pumps as there is less competition around. Excuse my French, but that's one hell of a reasoning worse than a cow's dung. Less competition or no competition does not give any merchant or any enterprise
the right or license to force into the throats of any Juan, Pedro or Pandoy the idea of unfair pricing. There is no such law in this country nor such law exists elsewhere. “Free trade is not based on utility but on justice.” to borrow Edmund Burke's words.

According to CCCI, "the price of unleaded gasoline range from P38.85 to P39.41, about P5 less than the price in Cebu of P45.19.The diesel in Manila also sells from P28.35 to P34.25, also below the P36.31 per liter price in Cebu." observes CCCI president Samuel Chioson. Also, the spate of recent increases in fuel prices “Further widens the gap between Metro Manila and Cebu prices." adds Chioson in an interview with this paper last month.

As with sire, so with the scion. As with their oil heads in the US, so with their local hydras. The "tyranny of oil" begins at the heart of great America that even America speaks of it shamefully. Obama said he is "fed up "and so are the Americans. The machinations of these tyrants is not only felt by the Americans, but by the people the world over. "Without viable and accessible alternatives, entire economies suffer when increasing proportions of national budgets must be used to purchase oil. And on an individual level, families, facing the same lack of alternatives, forgo basic necessities when gasoline prices skyrocket."

The "Big Oil" thrives on secrecy, a lack of transparency, and control over information." says Antonia Juhasz author of the "Tyranny of Oil." Like their fathers in America, local oil companies or "The Big Three" comprising of Shell, Petron and Chevron (formerly Caltex) inherit the same disdainful hallmarks -- the sheer lack of accountability in the way they conduct their business. If you've followed this issue closely, this paper reported just a week ago the different "justifications" of the Big Three with regard to the disparity in prices aside competition. Petron reasoned on the pretext of "losses" when they reduced their prices below the suggested retail price in Luzon. And yet if we look at the numbers, Ibon Foundation disclosed on GMA 7's website, that Petron actually recorded profits of P5.94 billion in 2007 alone. Likewise "Its net income has been progressively increasing in the last three years, posting P5.76 billion in 2006 and P3.42 billion in 2005." We can only surmise that Shell and Chevron want to avoid the "losses" excuse because the public knows too well how their huge profits have spilled all over since 2005.

Blame it on the transport leg. I find this very popular or maybe among the most favorite arguments oil companies employ to justify the extra that has been added per liter at the pumps. Conversely, this is not only very unrealistic but ridiculous at best. Oil companies can easily invent or make up their own cost per leg in the logistics chain simply because they practically own much or control the total transport leg.

But for the sake of comparison, let us use moving a can of sardines or a pack of noodles from manufacturer to the retail shelves
as examples. That is, when you buy sardines or noodles from a supermarket in Manila you hardly notice the price difference when you buy them here in Cebu. So what's so special about moving petroleum and moving ordinary commodities? Nothing, except a negligible extra for insurance.

And if you really come to think of it, the effective cost of moving a truck of ordinary goods from Manila to Cebu is more expensive than the cost of moving a truck of fuel from Singapore to Manila. The reason is that, most companies do not have their own boats, trucks, warehouse and etc. When I was with the export industry before, we came across several studies where the cost of moving per nautical mile here in the Philippines is almost twice when compared to Hong Kong to Singapore or other Asean counterparts.

But this does not apply to oil companies. Petroleum companies have a commanding and highly developed logistics division to cut through the transport leg. They have their own tanker ships, trucks, depot and etc. not to mention the inherent privilege to enjoy rock bottom fuel prices to run their refineries and logistics chain.That's why, the argument on the account of the transport leg, to say the least, is not plausible or without credibility.

The call of the CCCI to boycott the Big Three may be difficult at this point. But it is a good start nonetheless. The task is laid before them and before us to inform the public of the dangers of setting loose of such powers to determine prices of petroleum into the hands of a few that actually own and control these commodities. For sure, those very hands will be there to eventually serve their pockets. Lest we be choke by these same ruthless hands, we can use our hands to overrule those powers -- to refuse, to protest and to cause the will of the wide majority that the stewardship of oil rests in the hands of the consuming public.

"For the ignorance of the public is the real capital of monopoly" -- Henry Demarest LLoyd


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