POSTSCRIPT / August 30, 2005 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

Share on facebook
Share This
Share on twitter
Twitter

Is Saudi trip of GMA needed to get cheap oil?

TWIN MISSIONS: President Gloria Arroyo will ask her Saudi counterpart when she visits Riyadh Sept. 10-11 for two things about oil: that the Philippines be assured of continuous SUPPLY and that it be sold to us at a special PRICE.

Energy Secretary Raphael Lotilla disclosed this presidential agenda in an interview last Saturday with broadcaster Noli de Castro, who as Vice President will mind the store when Ms Arroyo leaves for abroad.

“Ipapakiusap ni President Arroyo ang special price at patuloy na supply ng langis sa Pilipinas,” sabi po ni Secretary Lotilla kay kabayan Noli.

But the President of this impoverished country does not have to fly with her entourage all the way to Saudi Arabia to achieve those twin missions.

It seems to this observer that the hurried trip could just be part of a communication plan to dramatize the energy crisis and thereby distract attention from the President’s sagging popularity and threatened impeachment.

* * *

PETRON DEAL: If she is not uneasy with him, President Arroyo may want to ask former President Fidel V. Ramos for backgrounders when he comes calling at Malacanang to dispense advice on how to run the country.

When then President Ramos sold to Saudi Aramco the government’s 40-percent share in Petron Corp. — and with it the country’s only countervailing force against rapacious foreign oil firms — he explained that that “strategic move” was meant to assure adequate oil supply.

I suppose that Mr. Ramos, a micromanager to a fault, had made sure that that Saudi commitment to keep the oil flowing was written into the contracts.

President Arroyo does not need to go to Riyadh to try to do what Mr. Ramos already did. She need not issue redundant press releases about supply commitments. The oil will keep flowing as long as we have the money to pay for it.

* * *

LEVERAGE SOLD: Mr. Ramos had to explain his sale of that major holding of government, because at that time he sold the shares Petron was the biggest oil firm hereabouts, controlling a commanding 40 percent of the market.

With that dominant presence, Petron was in a position to hold the line when Pilipinas Shell Petroleum Corp. and Caltex Philippines Inc. wanted to raise prices. The government, through the Petron board, could dictate prices that were politically correct.

When control of Petron was sold (not for 30 pieces of silver, really, but for millions of dollars), we lost our only effective market leverage against arbitrary increases of prices by the oil oligopoly.

Petron, btw, was also one of the biggest money-makers of government. Now the main income the government derives from it is in the form of taxes.

* * *

WHY CONFIDENTIAL?: Those contracts also committed other sensitive things: that Petron will source the bulk of its oil requirements through Saudi Aramco and surrender to the Saudis key executive and treasury posts to give them virtual management control.

These contracts are invested with public interest, but if a taxpayer wants to examine them, he cannot do it, because the documents are covered by a confidentiality clause that bars the disclosure of their text.

Will some lawyer please explain to us why taxpayers cannot look into papers covering a sale of part of the patrimony.

Maybe a congressional committee can try prying the lid off that Petron transaction, but, on second thought, some fast operator in Congress might just use the inquiry to make money. Huwag na lang.

* * *

SPECIAL PRICE?: As for the special oil price that Lotilla mentioned, you can be sure that has been negotiated by technical people on both sides. Otherwise Malacanang will not talk about it and then get embarrassed if it does not materialize during the trip.

At this point, the naughty opposition may want to ask who gets the commission on the deal. In all transactions of that magnitude — like the importation of rice, the procurement of military materiel, sale of Petron shares, etc. — somebody gets the usual fat commission.

I assume that Saudi oil is not being sold to the government, which has neither refinery nor an oil exchange (as proposed by then Bataan congresman, now governor, Enrique “Tet” Garcia). The oil will be sold to Petron in this case.

Is the President acting as a marketing agent, for free, for a private oil firm? Is the President simply doing Petron a favor? The local Shell has its own foreign Shell oil sources and they have their own pricing scheme, while Caltex closed its refinery in October 2003.

This point about pricing assumes that Saudi Arabia, as we are being led to believe, is willing to sell the same grade of crude oil to Philippine buyers represented by Ms Arroyo at a price lower than it would sell to other (and much bigger) buyers.

On this point, we have to wait till they announce the agreed selling price — and the grade of oil being sold. Then we will see.

* * *

ULTIMATE TEST: The next question is: What is our assurance that the Saudi oil sold to Petron will redound to lower fuel price at the pump?

That is the ultimate test of the Saudi jaunt of the President meant to drown out the big fuss over electoral cheating, jueteng payola and whatever dirt the political opposition is throwing at her.

When we see after the President’s trip that Petron pumps are dispensing gasoline and diesel and selling containerized cooking gas at prices lower than Shell, Caltex and Total, then — and only then — are we to believe that Ms Arroyo’s mission was successful and worth the expenses.

Until we witness that miracle, we can safely dismiss her coming Saudi trip as just one of those calculated distractions.

* * *

OIL WINDFALL: The way they engage in creeping price hikes, the oil firms probably want consumers to think they have been losing money or just breaking even, or that the fuel they are selling is fast running out.

Comes now lone Catanduanes Rep. Joseph Santiago (NPC) reporting that the country’s refiners — Pilipinas Shell Petroleum Corp. and Petron Corp. — raked in a combined P11.6 billion in after-tax profits in the last 18 months as they wallowed in soaring prices.

Citing their financial statements filed with the Securities and Exchange Commission, Santiago said Shell and Petron posted P2.87 billion and P2.31 billion, respectively, in net profits from January to June this year alone, or a combined P5.18 billion.

In the 12 months of 2004, Santiago said Shell and Petron posted P2.98 billion and P3.43 billion, respectively, in net profits, or an aggregate of P6.41 billion.

With its huge earnings, Shell was able to distribute P5.56 billion in dividends to its shareholders within the 18-month period — P2.59 billion last year plus P2.97 billion this year.

Petron paid P2.9 billion in dividends to its shareholders over the same period — P1.88 billion last year plus P938 million this year.

* * *

TRACKING GARCI: It is not true that Malacanang and the national bureau of investigation do not know the whereabouts of former Comelec Commissioner Virgilio Garcillano, who has been on the run since he was linked to alleged election cheating.

The Palace and the NBI have the means, and the motivation, to locate the official accused of manipulating poll results in the 2004 presidential election.

Among other things, the NBI can ask the US federal bureau of investigation for help, especially now that Garcillano is reported to have moved to the New Jersey area or other places in the US.

He cannot be going around carrying suitcases of money, especially at ports of entry. He must have fat bank accounts from which he draws funds and pays bills. Since the money that he carries or moves is surely more than $10,000, there must be anti-money-laundering records.

* * *

CREDIT CARDS: Garcillano is likely to be using credit cards as he moves along, unless a traveling companion is acting as his finance officer and is handling all payments and money transactions.

The consolidated record of the past six months involving his credit cards and bank transactions will give away his movements, where he goes, what he buys and pays for, and his direction and preoccupation.

There are many other simple ways of tracking down people on the run, but I find this credit card and money laundering method among the easiest.

The only plausible reason why Malacanang cannot locate Garcillano is that it does not want to.

* * *

(First published in the Philippine STAR of August 30, 2005)

Share your thoughts.

Your email address will not be published.