monopoly control and the deregulated oil industry

8/2/2019 Monopoly control and the Deregulated Oil Industry

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March 14, 2012


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1. The global oil industry is dominated by a few transnational

corporations (TNCs) from the US & Europe that impose excessiveprices

2. Global oil prices are further artificially bloated by speculation

3. Exorbitant global oil prices are fully shouldered by Filipino

consumers & motorists due to Oil Deregulation Law

4. Deregulation did not dismantle but even strengthened PH oilfirms w/ ties to global oil monopoly

5. Local prices are further made excessive by the imposition of the

12% value-added tax (VAT)


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Shell (UK/Netherlands), ExxonMobil (US), BritishPetroleum (UK), Chevron (US), & Total (France)control:

72% of total revenues of top 10 oil companies in terms ofrevenues (including state-owned firms )

58% of production capacity, 65% of refining capacity, &

75% of sales of top 10 oil companies in terms of oilreserves (including state-owned firms)

Shell total revenues is twice the size of PH economy(2010)


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Estimates range from $28.08 to $41.91

If Dubai crude is at $109.54 , thats a $67.63 to

$81.46 difference which represents monopolyproifts and price speculation

Wikileaks cable July 2008 Saudi Oil ministertells US envoy that up to $40/barrel in oilprices is due to speculation


5/12

Financialization & deregulation of US futures

market allowed massive speculation in

commodities (speculative entities hold asmuch as 70% of oil contracts in futures

market)

Industry admits speculation (US EIA,ExxonMobil, Goldman Sachs, Saudi oil

ministry, & even PH DOE)


6/12

Global prices artificially bloated by monopoly

pricing & speculation directly transmitted to

local pump prices

Automatic, weekly adjustments 8 rounds of

OPH in 1

st

10 weeks of 2012 (P5.85/L hike ingasoline; diesel, P3.20; & LPG, P190+/11-kgtank)


7/12

80% of oil sold in the PH go thru production & distributionchain directly controlled by global oil monopoly

Petron, Shell, Chevron, & Total control:

100% of crude oil imports (Petron & Shell)

100% of refining capacity (Petron & Shell)

80%+ of storage capacity

80%+ of retail stations


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Almost P6 per liter added to the pump priceof diesel due to VAT; almost P7 per liter for

gasoline; almost P110 per 11-kg tank for LPG

P1 B in additional VAT revenues for every $1increase in the price of Dubai crude (DOF)

P26 B in estimated VAT windfall for 2012assuming persistent high prices & steadyconsumption


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During the peak oil prices in 2008, govt

reportedly earned P58 billion in VAT on oil

In 2010, VAT on oil revenues estimated at P47Bilion

In 2011, congressional study VAT on oilrevenues expected to reach P70 Billion

In 2010, Aquino promised to recoup P150billion in tax leaks. If half of target was met,

thats equivalent to oil VAT revenues


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SECTORESTIMATED SAVINGS FROM

THE CANCELLATION OF VAT

ESTIMATED NUMBER OF

BENEFICIARIES

JEEPNEY DRIVERS USING 30

LITERS OF DIESEL PER DAILY

TRIPP173 PER DAILY TRIP 426,572 JEEPNEY DRIVERS

TRICYCLE DRIVERS USING 4LITERS OF UNLEADED PER DAILY

TRIPP28 PER DAILY TRIP 581,578TRICYCLE DRIVERS

SMALL FISHERS USING

MOTORIZED BANCAS W/ 10

LITERS OF GASOLINE PER

FISHING TRIP

P69 PER FISHING TRIP 708,000SMALL FISHERS

HOUSEHOLDS USING 11-KG LPG

TANK P100 TO P110 PER TANK 8.6 MILLION HOUSEHOLDS

HOUSEHOLDS USING 4.2 LITERS

OF KEROSENE PER MONTH FOR

COOKING & LIGHTINGP28 PER MONTH 9.4 MILLION HOUSEHOLDS

Sources of data: DOE, LTO, IMF, NSO, PISTON, PAMALAKAYA, INTERVIEWS


11/12

Bring down price of oil as immediate relief forconsumers & motorists by scrapping the VAT

on oil

Control oil prices by junking the OilDeregulation Law & enacting HB 4355

Dismantle the oil cartel & greatergovernment role in the oil industry towardsnationalization of the entire energy sector


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monopoly control and the deregulated oil industry

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