Chevron joins anti-oil smuggling chorus

MANILA, Philippines – Chevron Philippines, Inc. (Chevron) joined oil giants Petron Corp and Pilipinas Shell Petroleum in urging the government to implement stricter measures to curb “widespread and unabated” oil smuggling in the country.

Chevron, which retails oil products in the Philippines under the Caltex brand, said that the country is missing out on tax revenue from the importation of refined petroleum products.

“The extent of forgone revenue from taxes arising from illegal activities like smuggling does not always result to lower pump prices, but rather only enriches the pockets of certain middlemen and other unscrupulous personnel involved in the whole gamut of smuggling activities from the time of importation of the fuel products to the sale thereof to the end consumers,” Chevron country chairman and general manager Pete Morris in a statement on Thursday, April 4.

He added that the Philippines is missing out on foreign direct investments because of “limited confidence that the government can provide a level playing field for all industry participants. 

Chevron urged the government to give enhanced police powers to the Department of Energy (DOE), which it said should be given the authority to close down or penalize errant retail outlets. 

Chevron cited its over $2 billion capital investments in the Philippines, as well as interests in geothermal energy and natural gas. It currently has a 15% market share of retail and commercial fuel sales in the country.

These are sentiments shared by bigger rivals who are part of the Petroleum Institute of the Philippines (PIP). The industry organization’s members include Petron, Pilipinas Shell, Total, PTT or Liquigaz.

The PIP estimates that around a third of the diesel products currently in the market are smuggled.

On April 2, Petron CEO Ramon Ang said that the country loses P30 billion to P40 billion every year due to oil smuggling. He added that smuggled oil “now accounts for at least a third of the total volume sold in the market.” – with reports from Christian U. Bautista/Rappler.com