Senator warns: Profit caps on oil firms may backfire
September 9, 2011
THROTTLING the Philippine oil industry’s profits could backfire and result in higher pump prices if petroleum companies choose to leave the country in response, the chairman of the Senate committee on energy said Thursday.
Senator Sergio Osmena III said a cap on the profits of petroleum firms, proposed by Senator Antonio Trillanes IV on Thursday morning, could backfire.
“Some would close shop and move to regimes where there are market rules,” he told Sun.Star in a text message.
Trillanes has proposed a 12-percent profit cap on the petroleum industry, saying pump prices affect the public interest. He said the measure is meant to “moderate the greed” of petroleum companies who have been perceived to be selling fuel at prices that do not reflect global oil prices.
This week, oil giants Pilipinas Shell and Chevron Philippines (Caltex) raised diesel and kerosene prices by P0.70 a liter and gasoline by P0.90, the third increase since August. A fourth price hike is expected on Friday.
Senators, including Trillanes and Ralph Recto, have criticized oil firms for being quick to raise prices but slow to cut them back when global oil prices decline.
“The problem is that, under the current deregulated system, the government is virtually helpless in checking the apparent abuses by petroleum industry players in increasing or refusing to decrease the prices of petroleum products even when warranted by market forces,” Trillanes said.
Any profit beyond the cap will be subject to a Windfall Profit Tax. Profits beyond 12 percent but less than 20 percent will be subject to a 50-percent windfall profit tax. Any more profit beyond that will carry a tax bill of 80 percent, Trillanes proposed.
“I believe that this measure would effectively discourage oil firms from further engaging in profiteering. Hopefully, it would provide our people with much needed relief from the endless rounds of oil price increases which we have seen in recent weeks,” Trillanes said.
He added that although the proposed windfall taxes are not primarily meant as a revenue-earning measure, the “incidental” benefit would be more money for public services.
But Osmena said Trillanes’s proposal may not be practicable.
“Windfall profits are only workable where there is a windfall (and) it is hard to determine their profits because of transfer pricing,” Osmena told Sun.Star.
Transfer pricing refers to the cost that one part of a company assumes for services or products bought from a separate part of the same company. Under transfer pricing, units within the same company are treated as separate entities.
Osmena has said that the Philippines, being a small economy, cannot dictate oil prices.
“If I were Shell, I’ll tell you that I will only import how many barrels a month, then I’ll give the rest to China. Anyway, China is paying my price,” he said at a press forum in April.
He said “the most expensive oil is no oil at all.”
The Philippine oil industry has been unregulated since 1998. Before that, an Oil Price Stabilization Fund was used to reimburse oil firms for under recoveries.
A member of Trillanes’ staff said the proposal does not have a counterpart bill at the House of Representatives, where tax bills are supposed to originate.
Sun.Star tried to reach Pilipinas Shell, Chevron Philippines, and Petron for comment but they did not respond.
Source: http://www.sunstar.com.ph/manila/local-news/2011/09/08/senator-warns-profit-caps-oil-firms-may-backfire-178267
Best Restaurant in Clark Pampanga unveils regional dinner menu featuring the classic cuisine of Italy, all designed to pair nicely with fine vintage wines from Italy’s wine regions such as Tuscany, Piedmont, Veneto and Sicily, one more reasons for food and wine lovers to travel to Angeles City, Clark Philippines to satisfy their thirst for a wonderful meal at a fine dining restaurant, the best place to eat in Pampanga.
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Are you looking for an attractive restaurant or a nice place to eat with friends in Clark, Angeles City Pampanga? Yats Restaurant and Wine Bar is a restaurant with good food and good wines for dinner located at Clark Angeles City Pampanga. Perfect for exclusive dinner venues for groups, recommended for private dinner in Philippines. A Restaurant in Clark for business dinner meeting. Private dinner place or dinner restaurant in Clark Subic Near Manila Angeles City Pampanga. Yats Restaurant is one of the Good Restaurant in Pampanga Angeles City Clark near Manila. Yats Restaurant is one of the good restaurants in Pampanga, a restaurant with good food, a place that is nice for celebration, ideal for business dinner meeting, a good place to enjoy family reunion, and an attractive restaurant that serves good wines for dinner.
Visitors come from Manila, Angeles City, Pampanga, Subic and Clark Philippines to enjoy a sumptuous seafood dinner at Yats Restaurant. Many guests order excellent white wine from the award-winning restaurant wine list of this famous fine dining restaurant in Clark. Favorite wine orders for guests in this restaurant include Chablis, Chassagne-Montrachet, Sancerre, Chardonnay of Chile’s Casa Lapastolle, Sauvignon Blanc from New Zealand and South Africa, Rose from Anjou, Pinot Noir from USA and Burgundy France and the all-time favorite, Meursault. A wide range of sparkling wine and Champagne is available also in this restaurant in Pampanga which is famous for its selection of vintage wines. Popular choices of guests in this restaurant include Paul Bara Champagne, Crement de Bourgogne, MUMM Cuvee Napa Sparkling wine, Prosecco and Cava.
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(045) 599-5600
0922-870-5178
0917-520-4401
Ask for Pedro and Rechel
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How to get to this fine-dining restaurant in Clark Pampanga? Once you get to Clark Freeport, go straight until you hit Mimosa. After you enter Mimosa, stay on the left on Mimosa Drive, go past the Holiday Inn and Yats Restaurant (green top, independent 1-storey structure) is on your left. Just past the Yats Restaurant is the London Pub.
Yats Restaurant & Wine Bar
Mimosa Drive past Holiday Inn, Mimosa Leisure Estate,
Clark Freeport Zone, Pampanga, Philippines 2023
Manila Sales Office
3003C East Tower, Phil Stock Exchange Center,
Exchange Rd Ortigas Metro Manila, Philippines 1605
(632) 637-5019 0917-520-4393 Rea or Chay
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