To mitigate the effect of oil price increases, a director at state-led Philippine National Oil Co. (PNOC) on Thursday proposed an expansion of the business role of the company and its subsidiary by entering into consignment marketing and business agreements with a privately owned refinery.
Rex V. Tantiangco, board director in PNOC and former chairman of the Energy Regulatory Board (ERB), said through Viber that he suggested the re-entry of PNOC into oil marketing and trading as an alternative proposal instead of reviving the oil price stabilization fund (OPSF).
The ERB is the precursor of the present Energy Regulatory Commission.
According to Mr. Tantiangco, due to the volatility of crude oil and refined petroleum products, the government should adopt measures that would stabilize the prices of petroleum products to lessen the impact to end users, particularly, on the transport sector.
His suggestion includes PNOC selling petroleum products to participants in the transport sector such as jeepneys, buses, taxis, and technology- and app-based transport network vehicle service, at a calibrated amount of cash rebates without indulging in predatory pricing.
The privilege should be limited to franchise holders and should be properly coordinated with the Department of Transportation and the Land Transportation Franchising and Regulatory Board, he said.
Mr. Tantiangco said that such adjustable cash rebates can only be availed by the drivers upon gas purchase.
He said the scheme will not only result in less red tape but can also minimize corruption since “it would benefit only the daily gas consumptions of the legitimate PUV (public utility vehicle) drivers directly, not passing through channels.”
“Some oil companies are already making use of cash rebates, discounts, or sales incentives to their card holders’ customers,” he said.
Mr. Tantiangco also said that the importation of crude oil should be a government-to-government arrangement, especially during global oil crises.
To ensure steady inflow and delivery of crude oil, the government should arrange a one-year supply agreement with crude oil producers and suppliers, he said.
“PNOC shall be the industry price leader. As an independent oil player, PNOC will be engaged in marketing petroleum products, thus, will have the data/info of [the products’] price components. It will definitely sell its products at reasonable prices,” he said.
He also proposed that through a tolling agreement with a local refinery, PNOC should process the imported crude oil into finished petroleum products for a “tolling fee.”
“Incorporated in the agreement is the swapping of products: PNOC to swap the unneeded finished products with needed products, or sell to local dealers/bulk users the surplus products at prevailing international price postings,” Mr. Tantiangco added. — Ashley Erika O. Jose