The Oscars This Time Might Just Go To Oil Executives
Written by Major Tom
Filed under: Philippine Politics
February 13, 2006
Last November, I had blogged about this issue, on why oil companies in this oil-starved country of ours are fast to the trigger in increasing fuel pump prices whenever world market prices tick just a little bit upward and YET companies like PETRON keep on harking (which I think is heinous) about “remarkable” increase in annual profits. (See my previous post “The Bottomline of Oil Price Increases Is Double Profits For Oil Companies”.)
I mean, the math here is so simple that what we need to ask is how come these local oil companies kept on fretting and complaining about too-stretched up profit margin (where they always aver that they are already almost on the losing end every other time world oil prices moves upward even by just a dent) WHILE the records and newspaper reports show otherwise. We kept on seeing those neat-looking oil company executives being interviewed on evening news explaining to the public that they “have no other choice left but to increase pump prices” with the rising world prices and yet the next morning we read in the newspaper how this and that oil company raked in record amount of profits. If somebody ain’t lying here, then I must have been misreading my news. I bet it ought to be illegal from now on for oil executives to play-act on television, acting so downtrodden whenever they announce an “inevitable” oil price hike and yet they would be nowhere in sight when we learned later on that the “inevitable” might not have been evitable afterall. I mean, it’s quite clear that these companies have been skinning us alive even from the beginning.
Now, consider this. Malacañang had called on all local oil companies to explain why they need to have the fuel pump prices hiked again. Press Secretary Ignacio Bunye said that the President wanted “..to ensure that there is a clear justification for such increases in accord with the situation in the world market,” (This may be one of the rarest moment where Malacañang makes some truly sensible move. What probably prompted Malacañang to demand a written explanation is the recent buzz on the world business scene where Exxon has just earned for itself a record $36 Billion in annual income, the biggest in history for a U.S. corporation (This has led a New York congressman to quip, “It’s outrageous for big oil to be making these kinds of profits,”). It’s total revenues of $371 Billion is even bigger than Indonesia’s $271 Billion even while Indonesia is an oil-producing country itself (This finally proves that middlemen in the oil business can be just too smart for comfort) and Exxon’s $36 Billion annual income is bigger than that of 125 nations. It’s not only Exxon who is making big waves and riding the profit superhighway, Royal Dutch Shell’s $23 Billion profit for this year is a whopping 30% increase from last year (highest ever for a compaby listed in the United Kingdom). Other companies like Chevron is experiencing high profit windfall. in the local scene, Petron continues to raked in what many terms as “remarkable” profit increases.
I wonder what this local oil executives will cite as reasons why recent oil price hikes are inevitable. If I were the President—with all the facts attendant above—I wouldn’t believe any of the crap that they’d ve saying, as they start to act so downtrodden again (which could give them all the Oscars in the acting category). I think, I wouldn’t even read a single word from their “explanation letters”.
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Well, this is one of the subjects i covered in my blog. what makes me angry is that when there is an increase in world oil price, they raise the pump prices immediately but they are to slow ang gives so little roll back when the word oil prices decline.
The thing is, these companies behave like a sarisari store (as if this item needs no lead time for delivery)when it comes to increasing pump prices, and becomes an oil company when giving a roll back. Don’t they have an inventory to last for months and probably bought at a lower price. And what about the hedging they do in futures contracts and the rising Peso.
To me, they are a legalized economic saboteurs, opportunists and highway robbers.
With regards to government action, it is just a show-off. Why? The more profit these companies have, the more taxes they get (from e-vat, various taxes and corp tax).
Comment by myepinoy — February 14, 2006 @ 6:41 am
It seems to me that it is clear now that these corporate oil firms are doing some smart inventory manipulation, otherwise they wouldn’t have record amount in profits. It is almost heinous that in times of rising fuel prices, they earned these horrendous profits. Kung kailan pa naghihingalo and mundo sa pataas ng pataas na presyo ng krudo, ngayon pa sila kumita ng malaki.
Comment by Major Tom — February 14, 2006 @ 7:45 am
Actually, the fault lies in the government’s subservience to these multinational corpprations. They are too scared of them, this is one reason why we pay an arm and a leg for medicines. And also why we have one of the highest power rates here in Asia.
These MNC execs should be shot for their excesses…
Comment by snglguy — February 14, 2006 @ 11:51 am
To snglguy: I never thought and believed that upto this time, in the age of Laissez-faire, government and big business could be converging like snakes in order to cheat on the public. Tsk,tsk…I guess this must be a social problem that the people must ought to seek reform.
Comment by Major Tom — February 15, 2006 @ 6:30 am
Few of us may have underestimated the windfall from the oil profits. It is LARGE, so large that Raplh Klein, Premiere (gov) of the province of Alberta, Canada decided to shell out $1.4 billion back to Albertans inform of a $400 prosperity bonus cheque for every Albertan man, woman and child.
Some people look at it as electioneering or vote buying
( seriously, does any Albertan really care what the reason might be?).
check this link out http://west49er.livejournal.com/
Comment by bw — February 15, 2006 @ 6:21 pm
To BW: Lucky Albertans eh…I mean, this is the kind of government and government people we need here, one that goes with conscienciousness. God bless Ralph Klein…
Comment by Major Tom — February 16, 2006 @ 5:59 am
hi, major tom!
aside from being apolitical, i am becoming nonchalant as well. these politicians never tire of using the people for their own corrupt interests and whatever they do, they do it with vile intentions.
thanks for featuring me again here. belated happy heart’s day to you and to your family. thanks for the ecard, too!
Comment by bing — February 18, 2006 @ 8:09 am