With competitive forces at play in the deregulated downstream oil industry, the National Economic and Development Authority (NEDA) emphasized that an economic model or formula must be established to determine what must be deemed as “acceptable prices” at the gas pumps.

In a memorandum to President Arroyo channeled to Executive Secretary Eduardo Ermita, NEDA acting chief Augusto B. Santos noted the agency “does not have an economic model or formula to determine what the pump prices should be.”

He added that “to be able to determine what the pump prices should be, ideally we would need to know the revenues, the costs and the required or desired returns on investments of the oil firms which are data that may not be readily provided by the oil firms by virtue of the Oil Deregulation Law.”

It has been on this basis that the oil firms earlier concurred to demands that their books and financial statements be submitted to scrutiny – with qualifier that it be done within the bounds of the law.

Such financial records are easily accessible with various relevant government agencies, and the Department of Energy (DoE) already indicated that it can have them forwarded to NEDA should it be needed on the agency’s bid to draw up economic model in determining reasonable pump prices.

When industry discussions have been swirling over the impact of the oil price freeze imposition, Energy Secretary Angelo T. Reyes was also given the floor to revive long-standing skirmish with former NEDA chief Ralph Recto on the latter’s claim of P8.00 per liter overpricing on petroleum products.

While the energy chief might have a basis in dismissing Recto’s claim, the way Reyes has been articulating his arguments does not sit well with the media and the Filipino public, hence, he is always accused of “lawyering for the oil companies.’

Nevertheless, Reyes noted that he concurs with the observation of the new NEDA chief, stressing that the DoE, in tandem with the Department of Justice, have been doing their jobs as to monitoring and ‘policing’ pricing and trade violations in the industry.