smoke

I write better when I smoke. Don’t ask me to reduce it to a science.

Angry

I understand why people should be infuriated over the rising cost of gasoline and diesel. And I can understand the anger directed at these big oil companies. But I can’t understand why we should stew in our own anger.

The rise in pump prices in inevitable. They go up and they go down, and there’s really nothing anyone can do about that unless they have their fingers on the oil spigot – like OPEC does. During the dictatorship, the public very rarely felt these fluctuations because of the oil Price Stabilization Fund (OPSF) which ‘stabilized oil prices’ by subsidizing the fluctuations. The stability, in other words, was an illusion, still paid for by taxes. It was just that with the OPSF, people weren’t really conscious of the fact that they were still paying, albeit indirectly, for increase.

Regulation is not the answer. On one level, the concept of regulation is a throw-back to our deep seated desire to have someone else take care of our problems for us. On a more pragmatic plane, I’d remind de-regulationists that under the old regulated regime, the major players were practically guaranteed returns on their investments – the entry of new players was severely hampered, creating a virtually captive market for the big boys. With de-regulation, the entry of new players makes lower prices possible since – in theory anyway – consumers will choose the brand with the best cost-benefit ratio. I say in theory because – and this is prolly the reason why de-regulation seems futile – Filipino consumers are so friggin’ brand conscious. I know people who refuse to patronize outfits like SeaOil or Flying V simply because they were unrecognizable brands. This defeats the purpose of allowing new competitors.

So if de-regulation is such a good thing, why are pump prices rising like crazy? The answer is very simple: the pump prices rise because the cost of the raw material – crude oil – continues to skyrocket. So, even if de-regulation acts to bring gas prices down, the mere fact that crude oil gets more expensive by the minute guarantees that you won’t see any noticeable dip in pump prices the way you would if crude were not constantly getting costlier. Oh, and do I even have to mention that we have no control over the cost of crude except perhaps to drive it higher?

Even if the industry were regulated, the cost of crude would still be on the rise, and government would have to keep up with that cost anyway. Increasing the cost of raw materials necessarily increases the cost of the final product. Sure the pump price can prolly be pegged, but behind the peg is the need for government to pay for the difference between the pegged cost and the actual cost. And where will government get the money for that, I wonder?

One could argue that a pegged price will be better for the poor. Sure, it would – but only in terms of buying gas. The money to subsidize the cost has to come from somewhere, and when it does, other important things get under-funded. The annual budget represents, after all, a finite amount of money. If you put money aside for subsidies, other equally important budget items must take cuts.

At this point in the argument, agitprop shifts to its endgame by trotting out the tried-and-tested argument: corruption increases the cost of government. Cut corruption and you’ll generate enough savings to cover the subsidies. True enough, but the negative effects of pegging pump prices are immediate – money gets diverted from defense, education, health, and so on. Whereas the war against corruption is a long-term thing; and the benefits to be derived from it do not accrue in the immediate term either. So, your left with the situation where the disease is already killing you while the super-medicine you’re pinning your hopes on still hasn’t even arrived in the building.

Oil companies are under no obligation to cut their profits for the sake of the Filipino. Does that hurt?

Well, suck it up, bitch.

Despite their press releases and media manipulation and gala charity nights to the contrary, oil companies do not actually feel any moral obligation to sacrifice their margins for the good of the host country. Neither should they. Its a business, for cryin’ out loud, not a charity.

Ultimately, the best weapon we have for forcing oil companies to bring down their prices is to patronize the smaller players who, because of de-regulation, are able sell gas at lower rates. Boycott the big three, for instance, and they will certainly lower their prices to lure customers back. It’s actually as simple as that. Think of it as a restaurant competing against a small canteen.

Jeepney drivers, f’rinstance, will always eat at the cheaper canteen. If the market were all jeepney drivers, the big restaurant will go out of business unless it brings its prices down to compete with the teeny carinderia. That’s common sense. So why do jeepney drivers still line up at the Big Three’s rigs? All the while that they grumble about being victimized, these jeepney drivers actually feed their predators, thereby perpetuating their state of victimization.

Why try to spread anger?

So, the question is, if we’re not doing anything to help ourselves – like maybe choosing to patronize cheaper gas from smaller rigs – what call do we have to try to spread anger? It’s not like getting angry at the Big Three will make them roll back their prices. Hell, what do they care if a handful of Quixotes hurl paint or even shit at their walls when, at the end of the day, these same people buy gas from them anyway. Better by far to just teach people to stay away from these giants and work towards developing a more practical mentality about the whole problem.

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6 Responses

  1. Bencard says:

    rom, obviously the protesting kids and adult late bloomers forgot, or have not heard, of the good old law of supply and demand. only yesterday, the price of a barrel of oil in the world market dropped to about $138 (from about 142) because of “decreasing demand”. it seems less driving is done all over, and less use of gas-guzzlers, among other abstentions. looks like our clueless protesters are barking up the wrong tree..

  2. cvj says:

    Yeah, kawawa naman ang mga oil companies.

  3. Bencard says:

    cvj, you got that right. but i have no sympathy for them. i hope they are reduced to eating their oil, or all the fossil oil in this planet be left where they belong – somewhere in the center of the earth.

    but still, no sense in protesting the current price of oil. they might as well protest against the “unfairness” of mother nature allowing killer typhoons in the philippines every other day. mas mabuti seguro, huwag na lang silang gumamit ng ano mang sasakyan na pinatatakbo ng crudo o gasolina galing sa opec. buti pa maglakad, magkalabaw o mag-pedicab na lang sila.

  4. cvj says:

    [Mental Note: Use sarcasm on the web at my own peril.]

  5. Bencard says:

    cvj, trust me, your sarcasm wasn’t lost in me. but what i say, i mean it.

  6. UP n student says:

    Whether the GSIS’s and the CALPERs were furious at the oil companies, they knew enough to buy oil stocks.

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