Research group IBON welcomes the formation of a review committee to audit the books of oil companies amid calls for transparency. However, vital information needs to be disclosed to ensure the public that the monopolized domestic oil industry is not profiting at consumers’ expense.
The group said the public has been put at the mercy of the oil firms and their mysterious pricing schemes and left to take the oil companies’ word that their prices are fair and their profits reasonable. IBON enumerates the data that oil firms need to disclose to ensure the public that its welfare is not being jeopardized. Among others, this information includes:
1) the retail pricing formulas and strategies of the oil firms domestically and as they relate to their foreign mother corporations;
2) the overseas supply sources and the terms and periods of their supply contracts;
3) any payments local firms make to mother firms whether as profit shares, charges for technologies or services, fees and other payments;
4) refinery stocks and capacity;
5) inventories and storage capacity;
6) local sales and distribution to direct buyers, retailers and other oil firms.
While some of this information is already reported or are available, others such as supply contracts have unfortunately been claimed as “confidential” by the oil companies. This information will not just address legitimate public doubts but also is also crucial in assisting policy makers and legislators in developing responsible energy policies.
The group said that while the auditing of oil firms’ books is a positive step, the review should be a multi-stakeholder process involving not just government agencies but affected sectors and independent experts. The review should also address the pricing schemes of the oil companies, IBON said, adding that the oil industry is a critical sector that needs real transparency.