oil industry

Ramon Ang: Want lower oil prices? Buy from small competitors, not Petron

Ralf Rivas
Ramon Ang: Want lower oil prices? Buy from small competitors, not Petron

OIL. Tycoon Ramon Ang attends the House ways and means committee hearing on November 8, 2021.

House of Representatives' video screenshot

Ramon Ang also says he is willing to sell Petron to the government, but notes that the company lost P18 billion in 2020

Tycoon Ramon Ang told lawmakers and public utility vehicle (PUV) drivers to buy gasoline from smaller competitors instead of his company, Petron, if they want to save money.

During the House ways and means committee hearing on high oil prices on Monday, November 8, the Petron chief executive officer said his company, as well as other big players like Shell and Caltex, simply cannot compete with smaller players, as these companies can sell fuel at cheaper prices.

“They (PUV drivers) don’t buy from Petron, Shell, Chevron, if at all they buy a little, perhaps so they can get a receipt. They buy in bulk from the new players because these companies are very ‘efficient’ and have very low overhead cost and are able to sell, on average, P10 cheaper than us,” Ang said in a mix of English and Filipino.

“Do’n na sila bumili (Buy from those small companies),” Ang said, without naming the firms.

Gasoline, so far, has jumped by P21.95 per liter in 2021, while diesel and kerosene prices have soared by P18.10 and P15.64, respectively.

Inflation in oil prices rose to 32.9% in October, pushing up transportation costs.

Ang further explained that the government taxes gasoline and diesel by P17.60 and P11.41 per liter, respectively, contributing to high prices.

He went on to tell legislators that he is willing to sell Petron back to the government.

“Anytime po, puwede ko pa ipautang [sa gobyerno] in over five years to pay. I swear, if gusto ng gobyerno bilhin, pagawan ‘nyo na ng valuation,” Ang said, while also noting that Petron lost P18 billion in 2020 due to the pandemic.

(The government can buy Petron anytime, I can even give the government over five years to pay. If the government wants to buy the company, it should come up with the valuation.)

Why would Ang, a businessman, tell consumers to buy from competitors? 

He was likely hinting at unfair practices, particularly oil smuggling.

While Ang did not explicitly mention the issue and only referred to what he called “efficiency,” Petron has repeatedly raised the matter in the past.

“Oil is deregulated, everybody can import their own gasoline and diesel, everybody put up their own port everywhere. There’s a lot of imported oil and diesel all over the country. Nobody can monitor them. So therefore they are very ‘efficient,'” Ang said during the hearing.

In November 2019, he was quoted as saying in a Petron press release that “oil smuggling has worsened in recent years and it’s not only us in the industry but also the government and the entire nation that suffer because of it.”

In August 2019, Ang also blamed the Tax Reform for Acceleration and Inclusion law for allegedly causing the proliferation of oil smuggling.

Willingness to sell ‘welcome news’

Bayan Muna Representative Ferdinand Gaite said Ang’s offer to sell Petron back to the government is “welcome news,” adding that he hopes “the current administration or even the next one would take the offer so that government can have a say in controlling oil prices.”

“In fact, our House Bill 244 specifically calls for the full renationalization of Petron in a span of four to five years so that we can have a mid-term to long-term deterrent to runaway oil price hikes,” Gaite said.

According to the lawmaker, the bill is part of a range of bills to institute the policy of “independence from monopoly pricing by transnational oil corporations through the regulation and the gradual industrialization of the petroleum industry.” – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.