PRIVATE think tank Ibon Foundation urged the government to regulate the oil industry and remove the reformed value-added tax (R-VAT) on oil products, to provide relief to Filipino consumers.

In a statement, Ibon said if the deregulation of the oil industry and the R-VAT are kept, oil prices will remain excessively high and will continue to place a toll on the shrinking household budgets of consumers.

“The oil-industry sector is too monopolistic, critical and strategic to be left in the hands of private interests. Oil price will continue to rise as long as the industry is deregulated and the government is impotent in the face of powerful private profit-seeking interests,” Ibon research head Jose Enriquez Africa said.

The think tank said a deregulated oil industry is a major factor in excessively high domestic oil prices.

This, Ibon said, has already been seen in the experience of Thailand, another major oil importer. Gasoline, diesel and liquefied petroleum gas in Thailand have even tripled due to deregulation.

Industry deregulation in the Philippines have caused oil prices to increase fourfold and fivefold.

“Government can also take steps to recover majority control of Petron to increase its leverage in the market. At the minimum, it can control 51 percent of the oil firm with more solid control if it has 70 percent to 80 percent of it,” Ibon said.

The think tank said regulating the oil industry can be done progressively and effectively with a more socially responsible government.

At the same time, Ibon said removing the R-VAT on oil products will provide additional relief to consumers.

“[Removing the R-VAT] is the single most effective measure that will give the quickest relief from rising oil prices to the greatest number of Filipinos,” Ibon said.

Earlier, the think tank said six out of 10 Filipinos said they favored the repeal of the oil deregulation law.

The April 2008 Ibon survey showed that 58.6 percent of respondents said they agree with proposals to restore government regulation of the local oil industry and repeal the Oil Deregulation Act, or Republic Act 8479.

The law, which was implemented in 1998, removed government control over the downstream oil industry.

The survey was conducted nationwide from April 7 to 16, 2008, with 1,495 respondents from various sectors, using a multistage probability sampling scheme with a margin of error of plus or minus three percent.

Ibon Foundation Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.

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