Circular on fuel-price unbundling out
Credit to Author: JORDEENE B. LAGARE| Date: Thu, 30 May 2019 16:16:38 +0000
THE Department of Energy (DoE) has issued to the public a circular mandating oil companies to unbundle fuel costs, strengthening its monitoring of both local and international price movements of petroleum products.
Signed by Energy Secretary Alfonso Cusi on Tuesday, Department Circular DC2019-05-0008, or the Revised Guidelines for the Monitoring of Prices on the Sale of Petroleum Products by the Downstream Oil Industry in the Philippines, revised an earlier order, DC2005-08-007, or the Guidelines Implementing the Requirement of a Prior Notice on Price Adjustments Pursuant to Memorandum Circular 2001-05-002 and other related rules.
“These enhancements will provide the DoE and other relevant government agencies with the necessary data to formulate proactive and appropriate policy initiatives for the benefit of consumers and the downstream oil industry,” Cusi said in a statement on Thursday.
“Furthermore, the data provided will support the Department of Energy-Department of Justice (DoE-DoJ) Task Force investigations on reported incidents of anticompetitive behavior,” he added.
Under the new circular, oil firms shall inform the Energy department of their respective pump price adjustments not later than 3 p.m. a day before the implementation of pump-price movement (increase, decrease or no adjustment), and prior to any public announcement.
For liquefied petroleum gas (LPG) products, industry players must notify the DoE of any price adjustment not later than the end of every month and before announcing it to the public.
Price movement for fuel products may be implemented every Tuesday and LPG prices every first day of the month.
They should send a formal notice to the DoE’s Oil Industry Management Bureau (OIMB) of any fuel price movement via e-mail.
In particular, oil companies must provide the detailed computation with its corresponding explanation and supporting documents on the reason of the movement of each itemized price adjustment.
Components of crude prices are divided into four categories: international content (product cost, freight cost, insurance and foreign exchange rate); taxes and duties (duties, excise tax, value added tax, and other imposts); biofuel cost; and oil company take (port charges; refining, storage, handling, marketing and transshipment costs; other costs; and oil company profit margin).
Firms should submit the computation, explanation and documents on unbundled items as of Dec. 31, 2018 within two months following the effectivity of the circular or whenever required by the department of the DoE-DoJ Task Force.
The same data will be required every Dec. 31 and submitted to the OIMB not later than Feb. 28 the following year.
In the case of LPG products, firms shall provide the unbundled computation, along with an explanation on the price adjustment and portions of the LPG prices: oil company price, hauler’s fee, taxes, fixed and variable costs, profit margin, and total LPG refiller or dealer’s pick-up price.
The new guidelines shall take effect 15 days after its complete publication in two newspapers of general circulation.
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