The issue of high fuel prices in Dumaguete took center stage during the question hour of the Dumaguete City Council last Wednesday.
The issue was brought to the fore by Councilor Antonio “Tonyrems” Remollo, who said he wanted to get to the bottom of the issue regarding the huge disparity of fuel prices between Cebu and Dumaguete.
Engr. Antonio Labios, regional director of the Department of Energy Field Office in Cebu and Andrei Losare III, area sales executive of Petron, attended the session upon the Council’s invitation.
Remollo lamented the absence of the other invited guests from the other major players in the fuel industry. “I was told that they dictate the price of gasoline in Dumaguete,” he said.
Director Labios revealed that the highest fuel prices in the region are in Bohol, followed by Dumaguete.
When asked for the reason why the price of fuel in Cebu could go as low as P10 or P11 than the Dumaguete prices, Labios said the Cebu fuel market is characterized by an intense price war by the oil companies.
“We believe the prevailing price in Dumaguete is fair enough, because our Manila office did not make any pronouncement to the contrary,” Labios said. Other factors that determine the fuel prices, he said, are the peso-dollar exchange rate, hauling cost and market forces.
The Petron representative, Andrei Losare III, said that the Cebu is unique in that its rates are governed by a price war initiated by the small market players while in Dumaguete, the oil companies try to match each other’s prices.
Losare said that the stocks of Petron in Negros Oriental come from Bacolod. They had been transporting their fuel from Bacolod since their contract to supply fuel to Chevron at the Amlan depot had expired.
“But we maintained the Dumaguete pricing–it did not increase despite the fact that our fuel is transported from Bacolod,” he said.
Losare said that the price difference for diesel fuel between Dumaguete and Bacolod is only 17 centavos per liter.
Councilor Dan Leon did some computations and said that if the cost of fuel between Bacolod and Dumagueten is only 17 centavos per liter, the transportation cost is too low and would even make the fuel company lose money.
“When conditions like this arise, we subsidize the prices,” Losare explained.
When asked whether the low Cebu fuel prices are a result of fuel smuggling, Director Labios said he has heard of reports of fuel smuggling but they do not yet have any evidence to make that conclusion.
News reports published in national dailies have revealed massive fuel smuggling into the Philippines, mostly from Indonesia. Smuggled fuel, the reports, said, account for 30 percent of all the fuel sold in the market and the Department of Energy says the government loses from P 30-60 billion in taxes every year.
ABC President Albert Aquino raised a possibility that Dumaguete gasoline dealers could buy fuel from Cebu to take advantage of the low prices there.
The City Council ended its question hour with no specific resolution, but pledged to continue looking into this matter with the help of the three Congressmen of the province.
“We may be leading the inquiries but we would need the support of our congressmen,” said Vice Mayor Alan Gel Cordova.
