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IN a bid
to determine whether price adjustments made by oil
companies are reasonable, the Department of Energy
(DOE), accounting firm Sycip, Gorres, Velayo and Co. (SGV),
and the University of Asia and the Pacific (UA&P) on
Thursday signed a memorandum of understanding (MOU) for
the auditing of oil companies financial records.
Under
the MOU, the three parties agreed to cooperate in
reviewing the reports that will be requested from or
submitted by the oil companies; to prepare a fuel-price
reasonableness report; review and validate the amounts
and computations on the fuel-price reasonableness
report; issue an academic expert study and analysis on
the reasonableness of the prices effected by the
players; and have an enhanced downstream oil database in
the DOE through improved data profiling.
As
agreed, the DOE shall provide SGV and UA&P the needed
information and data that are not privileged and
confidential for the analysis of the fuel price
reasonableness report.
UA&P,
for its part, will determine the information needed to
do an academic expert study and analysis of the
movements of fuel prices, and shall provide both DOE and
SGV such study and analysis of price movements.
SGV, on
the other hand, will vet the fuel price-related
quantitative information by performing certain
agreed-upon procedures, which may include tracing the
amounts used in the draft academic expert opinion or
analysis to verifiable and/or general public
information; and verifying the clerical accuracy of the
computations used in the draft expert opinion or
analysis.
SGV
shall furnish DOE and UA&P a copy of the agreed
procedure report.
DOE,
using the results of work performed by SGV and UA&P,
shall initiate improvements on its data profiling
process.
David L.
Balangue, SGV and Co. chairman and managing partner,
said they (DOE, SGV and UA&P) have yet to agree on the
period of cooperation.
They are
supposed to meet January 15 to finalize the process,
timeframe, periods and requirements from each party.
Balangue said they will provide their service free of
charge.
“We will
just check the veracity. When they submit
information/figures, we want to make sure what they
submit is correct. And the way to do that is by looking
at the underlying documents, reports and other sources
–compilation of price and volume of importation,” said
Balangue.
He said
they will not simply rely on the submissions of the oil
companies, but will rely more on third-party information
from Singapore (Mean of Platts Singapore).
Balangue
expressed the hope that the initiative will be
institutionalized. “This is going to be a continuing
concern of the transport and public sector. I, as an
individual, am also concerned as to the reasonableness
of oil and LPG prices.”
He
suggested that they look at the years or period where
there were several fluctuations of oil and LPG prices
and relate this to the pricing that they’ve done.
Energy
Secretary Angelo Reyes earlier said the DOE has sought
the help of the SGV and UA&P to collect data on the
financial operations of the oil companies in order to
enable government to adopt a realistic program to ease
the impact locally of the rising global prices of crude
oil, particularly on the industrial and transportation
sectors.
Reyes
said this step was taken following a conference among
representatives of the DOE, Department of Trade and
Industry and the various transportation sectors,
including transportation operators and drivers’
associations.
Also
present was Raul Concepcion, chairman of the Consumer
and Oil Price Watch, which is keeping a close watch on
the trend of oil prices in the world and local
markets.
“The
data to be collected would enable the government to
realistically assess the impact of the price of oil on
the economy. He said the effect of the high prices of
oil on industry was estimated at only three to five
percent, while the transportation sector claimed to
experience an effect of from 25 to 30 percent on their
gross income,” said Reyes. |
