RP has new oil reform law<\/p>\n
MANILA (Reuters): The Philippine Senate has passed a new oil
\nreform bill designed to free the oil industry from decades of
\nstate control, senators said yesterday.<\/p>\n
The proposed law, approved by a 13-0 vote on Saturday night,
\nwould replace an earlier oil deregulation law which the Supreme
\nCourt last November voided as unconstitutional, saying it
\ncontained some provisions that would foster monopolies.<\/p>\n
The House of Representatives is to vote on Monday on its own
\nversion of the proposed new law and a joint panel representing
\nboth chambers is to meet later to iron out any disparities
\nbetween the Senate and Lower House versions.<\/p>\n
The Senate version imposes a uniform three percent tariff rate
\non importation of crude oil and refined petroleum products.<\/p>\n
The previous law encouraged firms to invest in refineries and
\nimposed higher tariffs on firms that were just importing and
\nselling finished products.<\/p>\n
The court has said forcing firms to choose between investing
\nhuge amounts in refineries and paying higher tariffs would curb
\nfree trade.<\/p>\n
The Senate version also provides funds to pay the 2.6 billion
\npesos which the government owes oil companies in dues under the
\nOil Price Stabilization Fund (OPSF). The payment is to be made
\nover five years.<\/p>\n
The OPSF is a buffer fund used to soften the impact of
\nfluctuations in local oil prices. It ran into deficit because the
\ngovernment was unable to raise oil prices in the face of popular
\nopposition.<\/p>\n
Deregulation of the oil industry was a commitment made by the
\nPhilippines to the International Monetary Fund (IMF) before its
\nexit, expected early this year, from more than 30 years of IMF
\nsupervision.<\/p>",
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