Solon to govt: Buy back Petron shares

{mosimage}Bayan Muna Rep. Teddy Casiño on Thursday said that government should get back the majority shares in Petron Corporation to ease the country's burden of rising oil prices.

And one source for funds to buy back Petron shares, the lawmaker said, is the windfall revenues from the value added tax (VAT) on oil and petroleum products estimated between P16.7-P18 billion.

The party-list congressman is firmly opposed to government plan to sell Petron shares, saying said that it would "definitely lead to a permanent regime of oil price hikes as the government losses its only remaining foothold in a deregulated industry dominated by foreign oil firms and their local agents."

The government is looking to sell its 40% stake in oil giant Petron Corp. by November once approvals are secured from President Gloria Macapagal-Arroyo and the Philippine National Oil Co. (PNOC) board next month, according to Finance Secretary Margarito Teves

“Government, instead of selling Petron, should get back a majority stake to gain market leverage and effectively control the manner, rate, frequency and so-called justifications being made by oil companies in hiking prices,"Casiño said.

"Petron's sale shows that this government actually favors the weekly oil price hikes done by oil companies. So far, prices have been hiked 15 times this year. We also view this privatization initiative as an administration fund raiser for its slate in the 2010 elections," the congressman added.

Casiño said that Petron refines, markets and distributes fuel throughout the Philippines and that it has consistently retained its 40 percent share of the country’s fuel market.

"It is easy to see that oil price hikes can be effectively be put in check if the state itself has market leverage. The problem with the Arroyo administration is its focus on raising funds – including selling Petron – for purposes other than the people’s immediate relief," Casiño said.

“Since government rejected British investment firm Ashmore Group’s offer of P6.531 per share, we think that it must instead get majority control of Petron if it is intent to alleviate the people’s sufferings worsened by each oil price hike. If government wants to take a clear and definite step towards addressing rampant oil price hikes, it should buy back Petron," Casiño said.

Casiño, principal author of House Bill 3031 that mandates the government to re-acquire control of Petron Corp.

He said that government only needs to acquire an additional 11% of Petron shares on top of the PNOC’s 40% stake for the state to gain the majority in the oil firm.

HB 3031 has been pending with the House Committee on Government Enterprises and Privatization since November 13, 2007.

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