Baguio gas retailers still selling at exorbitant rates

Despite DOE probe  

By Aileen P. Refuerzo      

BAGUIO CITY – Despite a probe on high fuel prices this summer capital, retailers are still selling these at exorbitant rates prompting Dept. of Energy oil industry management Director Rino Abad to urge setting up of more fuel retail stations in here to drum up competition and lower pump prices.

Abad told mayor Mauricio Domogan this could be one of investment opportunities in the city after the later bared Baguio has the highest fuel retain prices nationwide.

He said that at present the City has only 12 gas retailing stations which is relatively low when pitted with the area population.

“Density-wise if we have a population of 791,000 in the whole of Benguet, then that number is insufficient so we have to encourage more traders to go into this business,” he said.

Abad said that while the City has very low demand for oil considering that it is not an industrialized economy, the demand in the oil retailing businesses remain high.

For instance, the number of people lining up in one gas station in La Union annually is P10,000 while in Baguio, it is 18,000.

Abad said there is a weak demand in the Cordillera Administrative Region which he said is only at two percent of the entire Northern Luzon. 

Whereas Region 1’s demand is at 14 million barrels, CAR’s is only 150,000 barrels.

But 90 percent of the total demand goes to retail.

The mayor is expected to take-up Abad’s recommendations when he convenes the Baguio City Investments and Incentives Board for its quarterly meeting next week.

The board is also expected to firm up the investment areas and other provisions of the newly approved implementing rules and regulations of the city investments code.  

City government officials and DOE’s Oil Industry Management agreed earlier to jointly get to the bottom of the problem of the big disparity in the prices of fuel in the city vis-à-vis the lowlands.

Local fuel retailers denied having a hand in price discrepancies and denied allegations they have engaged in price manipulation and profiteering.

The cost gaps in the oil prices are about P10 in gasoline and P8 in diesel based on comparative prices in this city and in La Union.

In a dialogue called by the DOE, operators of Caltex, Petron and Shell retail stations said their charges were based on suggested retail prices dictated by their mother companies and that they do not have knowledge on the level of the “industry take” or the mark-up they were supposed to be imposing on their products.

Abad cited records that industry take figures in the city the last two-and-a-half years were much higher than those in La Union and even Metro Manila, which he said is “abnormal and astonishing.”

Baguio’s industry take figures were P2.75 for gas and P1.55 for diesel whereas in La Union it was only 96 centavos and 45 centavos, respectively; and in Manila even decreased by 38 centavos for gas and 45 centavos in diesel.

He said the P2.75 mark-up in gas was even higher by 10 centavos than the excise tax imposed.