MANILA, Philippines—Retailers of liquefied petroleum gas (LPG) Sunday said they may be forced to stop selling cooking gas should the government continue to impose price caps on petroleum products until next month.

“We are opposing [Executive Order No. 839] because there is another pending increase coming from the international market next month,” LPG Marketers Association (LPGMA) president Arnel Ty said in a phone interview.

Although it was still too early to determine the exact increase for next month, Ty said his group was expecting the international contract price of LPG to increase by $30 to $40 per metric ton in December due largely to a surge in demand during Christmas.
“If the EO is still in place, we may have a problem because no business would want to sell at a loss. The risk then is us being forced not to sell LPG products so as not to incur huge losses,” Ty said.

EO 839 has frozen prices of petroleum products in Luzon at their Oct. 15 levels due to the devastation wrought by storms in a large swath of the country’s main island.

At the Oct. 15 levels, prices of an 11-kilogram LPG tank should be between P530 and P580.

Ty said member companies had been supporting the implementation of the executive order since last month, even if LPG’s international contract price rose by $75 to $660 per MT in November, compared with the previous month’s level.

“We admit that we have moved our price upward, but still based on the legal amount of the suggested retail price (SRP). We just followed the highest SRP as of Oct. 15, which was P580 per tank,” Ty said.

Increase of P4.50/kg

Without EO 839, LPG prices should have increased by P4.50 per kilogram this month, he said.

LPGMA member companies, which supply cooking gas products to about 30 percent of the Luzon market, carry brands such as Island Gas, Regasco Gas, Pinnacle Gas, Cat Gas, M-Gas, Omni Gas and Nation Gas. They do not sell LPG from Petron Corp., Pilipinas Shell Petroleum Corp. and Chevron Philippines.

Petron Corp., the country’s largest refiner and retailer of petroleum products, recently increased the price of its 11-kg LPG tank in the Visayas and Mindanao by P43.12 to reflect the rise in the international contract price.

Should EO 839 be lifted anytime soon, Ty assured the public that LPGMA members would no longer raise LPG prices this month to recover potential losses, if any.

Amendments to oil law

In the House of Representatives, lawmakers are seeking amendments to the Oil Deregulation Law that would give the Department of Energy more powers to curb excessive profits by the dominant oil firms.

“This is our constitutional duty. The committee on energy chaired by Rep. Mikey Macapagal-Arroyo and the House ways and means panel led by Rep. Exequiel Javier are on top of these things and we have been in constant consultations even during the break,” said Speaker Prospero Nograles.

Congress will resume its session on Monday after a three-week break with the P1.54-trillion national budget for 2010 at the top of its agenda.

The House has stood behind the President’s decision to freeze oil prices despite warnings of supply shortfalls from big business.

Bulacan Rep. Reylina Nicolas, a vice chair of the House committee on trade and industry, said oil companies showed how insensitive they were by contesting EO 839 in court (Shell filed a case last week).

‘Firms after profit’

“The government has always stressed to oil companies that the oil price cap is only temporary while the state of calamity has not yet been totally lifted. It was made for the public good. It has become clearer now that some oil firms are only after their own interests and profits,” Nicolas said.

With the Palace refusing to be intimidated by the Big 3 players that plan to contest the price controls in court, Nograles has ordered the consolidation of eight bills seeking to amend Republic Act No. 8479, or the “Downstream Oil Industry Deregulation Act.’”

Nograles said authors of the bills should coordinate with each other to come up with a common proposal that would spur more competition among retail gas stations while giving the energy department more powers to crack down on abuses.

Aside from petroleum retailing, Nograles said Congress would step up the approval of measures encouraging the development of indigenous energy sources and the lowering of electricity cost.

Petron to open books

Petron Corp. Sunday urged the joint task force of the energy and justice departments to examine its books to determine whether the company was making undue profits by overpricing its fuel products.

“Petron has always adhered to transparency and fairness in the pricing of its petroleum products. We have always maintained that as a publicly listed company, our quarterly financial and operating records are open and can be scrutinized by anyone. We have 180,000 shareholders who can attest to this,” said Petron president Eric O. Recto in a statement.

Recto said there were many groups and personalities riding on the oil price bandwagon and causing confusion and undue expectations among the public.

“We hope that they (the task force) act on this matter immediately,” he added.

Petron had said that it was in fact expecting a loss of P1.5 billion in the fourth quarter of 2009 due to the implementation of EO 839.

“This loss could be even higher if international oil prices rise beyond forecast levels,” Recto said.

He said the company had fully cooperated with the government and had participated in various dialogues with the National Economic and Development Authority, Congress, and energy department on oil pricing.

In the first half of 2008, when international prices hit all-time highs, Petron fully cooperated with the energy department when it conducted an independent audit to ascertain whether local prices were reasonable, he said. With a report from Gil C. Cabacungan Jr.