POSTSCRIPT / September 28, 2000 / Thursday


Philippine STAR Columnist

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Cheaper fuel available; no need for price hike

THAT hot story told here about police brutality at the Seattle airport is true — but (blush) it did not happen to beauty titlist Ms Aurora Pijuan and her husband as earlier reported, but to some friends of her friend.

Pijuan just forwarded the story in the Internet to drum up support for the victims. Since it was written in the first person by the unnamed victim’s wife, the email sender (Pijuan) was mistaken for the victim’s wife.

Anyway, we’ll give you today an update on this manhandling case, which is kept alive with charges flying and with various groups joining the fray, after we share with you some important oil industry notes below.

* * *

IT is not true that at current prices the oil companies are losing, or should lose, money. A new oil player just sold a big amount of fuel to the National Power Corp. at P2-per-liter lower than what other industrial bulk users pay for theirs.

Considering that bulk users already pay a discounted price that is even lower than the retail price at service stations, this NPC transaction is proof that the oil companies can sell fuel at a lower price and still make money.

The new player sold fuel at P2/liter cheaper to win in the bidding participated in by six oil companies chasing wholesale purchases of industrial users. The winning bidder reportedly imported its stock from a neighboring country – showing that there is cheaper fuel outside the local oil cartel.

There is really no need to raise current prices. The big oil companies are not, or should not be, losing money as they have claimed.

* * *

THIS is the free-market transparent-bidding scenario that the proposed National Oil Exchange (OilEx) seeks to replicate on a bigger national scale. It will resort to international bidding to secure cheaper gasoline and other refined oil products.

There were six participants in the bidding called by the NPC whose fuel requirement is only a small fraction of our total national requirement.

You can just imagine how much lower the price could drop if the entire national fuel requirement were bid out monthly in one competitive transaction where some 40 refineries and traders worldwide were directly participating.

* * *

THAT’S the reason why the local oil cartel is so scared of the OilEx envisioned in the bill sponsored by Bataan Rep. Enrique T. Garcia and some 190 other congressmen.

The OilEx would expose the overpricing of the oil giants that even now presume to dictate power policy. The oil oligopoly (as the Supreme Court itself has described it) is preventing our having access to lower prices.

It is inconsistent and hypocritical of the Erap administration to expose small Filipino industries to foreign competition under the import liberalization dictates of the IMF-World Bank, while being careful to protect the foreign-dominated oil firms from cheaper imported fuel.

There must be billions of reasons for this double standard, di po ba?

* * *

NOW the oil cartel is poised to raise by more than one peso the per-liter pump price of gasoline and other oil-derived fuels, the 19th increase since Erap grabbed the presidency on a platform of a new deal for the mahihirap.

To deflect anger from his oil industry friends, Erap is throwing crumbs to the complaining masses to appease them. According to Palace press releases, the President would suspend the collection of specific or excise taxes on diesel and liquefied petroleum gas (LPG).

Sticking his neck out for the oil industry, Erap seems ready to absorb the blame if hell breaks loose. Never mind if the government loses revenue just so the oil companies keep their mega-profits. Sobra naman ang pagmamahal ni Erap sa oil cartel!

* * *

BUT wait! Will Erap please read RA 8184 (An Act Restructuring the Excise Tax on Petroleum Products) first before promising to suspend the excise tax on LPG?

Sir, there is zero tax on LPG. There is no tax to suspend!

Under that law, the specific taxes per liter on various oil product are as follows: Extra low lead — P5.35; regular gasoline — P4.80; extra unleaded — P4.35; jet fuel — P3.67; diesel — P1.63; kerosene – 60 centavos; Fuel oil — 30 centavos; and LPG – zero.

This LPG spiel of Erap sounds like his incredible “good news” that Microsoft boss Bill Gates would donate 80,000 computers to our public schools. Somebody forgot to tell Erap that Bill Gates does not make computer hardware, only software.

* * *

IN 1999, excise taxes collected from oil products amounted to P29,970,559,136.11. Collections are expected to go up again this year.

Aside from that, the government slaps a 3-percent duty on imported crude oil, applied on the Cost, Insurance and Freight (or CIF). The levy is provided in Section 6 of the Oil Deregulation Law (RA 8479).

The same rate of 3 percent is imposed on imported refined petroleum products. The idea is to level the field between the established oil companies with refineries and the new players planning to just import oil products.

* * *

THE duties collected on crude in 1999 amounted to P2,018 million, shared by the ports of Batangas (where the Shell and Caltex refineries stand) with P1,307 million and Limay (Petron refinery base) with P711 million.

From January to August (eight months) this year, duties on crude have gone up by some 50 percent to P2,405 million, with P1,416 million credited to the port of Batangas and the rest to Limay.

* * *

THE law allows the President to reduce duties on crude oil, but Erap does not seem inclined to suspend or shave the duty on crude. It does not fetch much anyway — about 10 times less than excise tax collections on oil products.

In the case of the excise taxes, although Erap wants to give the impression that he is raring to cut the tax on diesel and LPG, somebody has to tell him that he cannot legally do that. Only Congress may amend the rates it has imposed.

If congressmen and senators know their political PR, they should lose no time passing the amendments before the President grabs the credit from them.

* * *

SHELL spokesman Rey Gamboa told the Kapihan forum at a hotel last Monday that if the OilEx law is approved and the new exchange takes over the bidding of the national fuel requirement and oversees its distribution, his company would stay and compete.

This is a departure from the stance taken by Petron chairman Jose Syjuco Jr. who says that if the OilEx takes over, their refinery might have to shut down and Petron might just concentrate on oil/fuel trading to stay afloat.

Gamboa’s position appears to us to be more logical and credible since it is unlikely that the giant oil firms would abandon their huge investments just because the OilEx would disturb their profit-making.

Also, it is unlikely that the government, which controls 40 percent of Petron, would allow the oil giant to fold just like that. More so if the other oil firms decide to stay and slug it out.

* * *

SEATTLE MAULING: Now we can go back to that still-hot Seattle airport story erroneously attributed to Pijuan.

The woman in the story (and the one who wrote it) was not Pijuan but Maria Corazon (“Maricor” or “Maxi”) Magbag Olsen, a Filipina American married to US immigration lawyer Dennis Olsen, a Caucasian who was the victim of police brutality in the story.

The couple lives at 4927-128th St. NE, Marysville, WA 98271. We cannot give out their home and cellphone numbers, but their email address is

Charges are being filed and Seattle authorities are investigating.

* * *

RIGHT after we got the story last Saturday, we sent a query to to check the facts and get more details from Pijuan who we thought was at that email address. Meantime we prepared our column on the incident.

When deadline came and we still had not heard from, we had to make the difficult decision of going ahead with the story or leaving our column space blank. Despite our seeing some holes in the story, we went ahead and decided not to sacrifice our space.

Email and other reactions poured in, most of them denouncing the police and expressing sympathy for Pijuan and her supposed husband. But a few cited what they said was the stupidity or even arrogance of the victims for talking back to an arresting officer. Some readers begged for more details and a followup.

* * *

OTHERS who contacted were luckier in that they got a response. One of the first was Fernando Lopez of ABS-CBN who was a friend of Olsen. Another one was Bert Caoili, who is president of the Filipino community in Seattle and who is pressing authorities for action.

Ralph Diaz of Virtual Asia also received an email from Olsen confirming the incident and giving additional data. She said in her email:

“First, I want to get the facts straight. The incident happened to my husband and me, not to Aurora Pijuan. Ms. Pijuan is a good friend of my aunt. She forwarded my email to her, and she in turn, forwarded it to several of her friends. Since my narration was told from a first person point of view, people assumed she was the one narrating the incident.

“It went around for a bit; I guess, it still is; but, we’re trying to get the correction out. The story is true.

“We have filed a complaint with the Internal Affairs Department of the Port of Seattle. There were five officers in all. Sgt. Tracy McCurdy was the female officer who yanked him out of the vehicle. Officer R. Blackwell was the one who initiated the false stop. Officer Autuchovich was the one with the flashlight. And Officer Young was the most brutal one; the one who grabbed his testicles. The fifth one, we weren’t able to identify.”

We have more details but, sorry, no more space. We’ll pick up the story again next time.

* * *

(First published in the Philippine STAR of September 28, 2000)

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