Palace says oil firms can’t raise profitability issue

October 29, 2009 10:06 am 

MANILA, Oct. 29 — Oil firms cannot expect the government to believe their claim that they will lose money as a result of the fuel price rollback.

Deputy Spokesperson Gary Olivar remarked at this morning’s media briefing that the companies should have acceded to the request that they open their books. That is, if they are sincere in their dealings with the government.

One of the big oil players in the market, Petron, claimed it would incur huge losses if it sells at government-mandated prices. It thus warned that the company might be forced to stop selling their products to the public.

Olivar said the threat of shortage that has been raised is an issue that will be addressed when the appropriate time comes.

On LPG supply, Olivar said oil companies have inventories and long-term contracts in place. He added the threat of shortage should not be used as a bargaining weapon. In any case, he also said, the government will address the threat at the appropriate time.

He noted that President Gloria Macapagal-Arroyo, before she issued Executive Order No. 839, must have carefully studied the matter carefully.

“We have continuing consultation with industry players,” Olivar stressed.

Olivar said the "oil companies should have concurred with our demand to open their books to government auditors or to any authorized parties."

“Now they can no longer raise the profitability issue," he said. “You cannot have your cake and eat it too.”

He added the companies cannot hide their books and then ask the government for help in the pretext that their profitability is going down.

“They are asking us to take their word at face value," Olivar said. “That is difficult.”

For her part, Deputy Presidential Spokesperson Lorelei Fajardo said the government is now monitoring and evaluating the effects of EO 839 (maintaining oil prices to pre-Oct.15 levels) in view of the declaration of the state of national calamity.

"Let us wait for the study and the contract prices by Oct. 31,” she said. (PNA)

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