MANILA, Philippines — Malacañang on Thursday rejected the appeal of oil companies for a dialogue with President Gloria Macapagal-Arroyo on the possible recall of an executive order freezing fuel prices in Luzon, which remains in a state of calamity.

But Justice Secretary Agnes Devanadera indicated that the order may soon be lifted in specific areas as the government and oil firms try to reach an agreement on a mutually acceptable response to the devastation wrought by successive storms.

“There may be a lifting (of the freeze order) in certain areas such that only specific local government units are covered. This is part of the response that may come in different forms,” Devanadera told reporters.

Ms Arroyo’s spokespersons balked at the appeal for a dialogue with the President, saying that oil industry leaders should be content to air their concerns to the Department of Justice-Department of Energy Task Force.

“The President has always been open [to a dialogue], but we have a task force,” Undersecretary Lorelei Fajardo said in a briefing.

Undersecretary Anthony Golez said any consultation must be coursed through the task force.

“This is happening in support of the reconstruction and rehabilitation of hundreds of thousands of families made victims by calamities,” he said.

Devanadera said the task force would meet next week with business groups, oil companies and the transport sector to discuss if the “emergency situation” remains and consolidate proposals to help those affected by the series of storms that lashed Luzon.

Full-page ad

In full-page ads that came out in the papers on Thursday, oil industry leaders requested Ms Arroyo to “allow us to sit down and discuss with you, so that you may consider recalling” Executive Order No. 839.

They said the order’s “imminent danger” to the economy, business and employment “far outweighed” the benefits.

“A weakened oil sector, forced to sell at a loss, cannot continue to play its strategic role as the government’s partner in the nation’s growth and in ensuring an adequate level of supply given the instability of world prices of crude oil and petroleum products,” they said.

Signatories to the ad were executives of Chemrez Technologies, Eastern Petroleum Corp., Flying V, International Engineers Phils. Inc., Liquigas Philippines Corp., Philippine Institute of Petroleum, Pilipinas Shell Petroleum Corp., Pryce Gases Inc., PTT Philippines Corp., Seaoil Philippines Inc., Total Dealers Association, Total Philippines Corp., and USA88/Filpride Energy Corp.

The government has come under pressure from big business groups like the Joint Foreign Chambers of Commerce, Philippine Chamber of Commerce and Industry, Makati Business Club and Federation of Philippine Industries to lift EO 839.

They warned that the order would cause oil industry to incur losses, pose a threat to adequate supply and serve as disincentive to future investment.

Increase of P4.50/liter

An oil executive said consumers should brace themselves for an increase in the prices of gasoline and diesel by P4.50 a liter, once Malacañang decides to lift the price cap.

Flying V chair Ramon Villavicencio said the company would mitigate the impact of the price adjustment through staggered increases.

Villavicencio said the company was proposing to oil firms to stagger the increase over a three-week period of around P1.50 a liter per week.

“We want to mitigate the impact on consumers, so we will divide the impact over three weeks. The EO will be lifted soon because the higher authorities know that it’s not viable as far as cost is concerned. There is a huge gap between cost and the pump price,” he said.

Help for the majority

Despite the warnings, Malacañang has not budged, arguing that the order was issued to help the greater majority of the people in Luzon to cope with the devastation and after-effects of powerful storms.

EO 839, issued on Oct. 23, put a cap on prices of petroleum products based on their Oct. 15 levels in Luzon.

Golez asserted that Ms Arroyo didn’t feel any pressure at all to lift the executive order.

“No, the President will not be threatened by the clamor. The President has made the decision to effect the executive order, and that is going to be done,” he said.

Golez disagreed with the observation of Albay Gov. Joey Salceda, a presidential economic adviser, that EO 839 tended to favor the rich than the poor.

“In the same manner that Governor Salceda is against it, a lot of people are for it,” he said, even as he argued that this would benefit the poor more because they have less buying power for basic commodities than the rich.

Counterproposals

Oil companies have submitted counterproposals to the Luzon-wide fuel price freeze that includes implementing the order in specific typhoon-damaged localities, according to Devanadera.

“The NDCC (National Disaster Coordinating Council) will make the final decision. There may be a decision next week,” she said.

The justice secretary said EO 839 was meant from the start to be a temporary measure, but could not say how long it would remain in effect.

“Both camps are now crafting some proposals in response to this calamity. It may come in different forms but what is important is we are able to address the clamor of the victims for assistance,” Devanadera said.

A common proposal from the business sector is to limit the imposition of the price freeze order only to devastated areas in Luzon.

“But nothing is final yet. I don’t want to say that there will be partial lifting of the executive order since proposals and ideas are still evolving,” she said.

No gas stations shuttered

Malacañang has not received reports that some gasoline stations have closed shop because of the order, citing checks with the energy department.

“This should be the subject of discussions in the dialogue on Monday,” Fajardo said of the reported closure of gas stations.

Golez also cautioned the oil companies against creating an artificial shortage of oil and other petroleum products to prompt the government to rescind the executive order.

“Whatever is the appropriate punishment will be meted out on them if they are found to be responsible for that,” he said. With a report from Amy R. Remo