Legislative amendments are being proposed into the Downstream Oil Industry Deregulation Act to establish the basis for ‘fair and reasonable pricing formula’ on petroleum products being sold at the gas pumps.

Given the fact that the Department of Energy (DoE) currently lacks stronger power to ‘monitor’ pricing movements in a deregulated market, it was proposed that the oil deregulation law be amended to set in a place an entity or body that must have tighter watch on the oil companies’ cost adjustments.

“If it is not the DoE, at least there should be a body that would be there to define or determine what is a reasonable price that will become the basis of price adjustments,” DoE director Zenaida Y. Monsada said.

Referencing on the latest price adjustments, the energy official noted that “the secretary wants to establish the basis as to what ‘reasonable price’ really means. Currently there is really no formula for it, but he really wants to get to the bottom of the computations or assumptions being employed by the oil firms.”

Apart from review of the oil price formulas and methodologies, the DoE will also be looking into the possibility of rationalizing tax concerns in the sector, such as the imposition of value added taxes (VAT), excise and import duties on petroleum products.

The energy department qualified though that they would want to push for the policy modifications in such a way that it will not disturb purported investment flows.

On the pricing issue, Energy Secretary Rene D. Almendras reportedly had questions on the uniformity of adjustments, which the oil industry players generally attribute to market competition.