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Energy chief gags oil companies on price hikes

Energy Secretary Angelo Reyes on Wednesday issued a gag order preventing oil companies from making media announcements about projections on the pump prices of their fuel products.
Reyes gave the directive while meeting with representatives of oil companies and liquefied petroleum gas industry players, including the LPG Marketers Association head Arnel Ty.
The energy secretary told the oil companies' representatives to refrain from disclosing their alleged under-recoveries to the media.
Reports earlier said oil companies could impose P1.50 per liter weekly pump price increases to offset under-recoveries in oil. An oil industry executive said this could translate to gasoline prices as high as P65/liter.
Reyes said the disclosure has caused undue alarm to consumers.
Over the weekend, the prices of fuel products increased by P1.50. The latest increase brought gasoline prices to about P55 per liter and diesel to P48. Kerosene had also increased between P48.30 to P53.50.
The energy secretary had said that the Department of Energy will investigate local oil companies and distributors of liquefied petroleum gas for allegedly imposing price increases that do not reflect actual fluctuations in the world market.
Directive welcomed
Total Philippines spokeswoman Malou Espina welcomed Reyes's directive. She said: "The secretary meant that oil companies should exercise prudence in making projections on possible price movements."
"You do not see in advance of how much you are going to adjust your prices... We do not want to be unduly accused of influencing the market," Espina said.
She said her company would have no problems abiding by Reyes's order. She said since Total is not a market leader, it cannot make price projections.
"We adjust prices based on the move," she said.
LPGMA irks Reyes
A visibly irked Reyes, meanwhile, reprimanded Ty for allegedly "cartelizing" the LPG industry.
"You have no right to speak for the entire industry," Reyes told Ty during the hearing, adding that the LPGMA president has been acting like the "leader of the LPG industry."
"You're increasing your price ahead of everybody, and when the price increases don't materialize, then you drop your price. You want to look good," Reyes told Ty.
Reyes said the most recent P3.50 price adjustment of the LPGMA was based on the LPG contract price last April, which he said is much higher than on May.
In defense to Reyes's accusation, Ty said the LPGMA's price, which is P610 for every 11-kilogram cylinder, is actually the lowest in the industry.
Ty's LPGMA distributes "independent" LPG products Regasco, Omni and Pinnacle.
Reyes had also accused Ty's manufacturing plants of "under-filling" LPG gas tanks and ordered the closure of Tys plants in Malabon, Quezon City and Pasig.