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Foreign businessmen yesterday joined the clamor for the lifting of the oil price freeze as mandated under Executive Order 389 due to its impact on forced losses on the petroleum, risk of future adequate supply, and disincentive to future investment.

In a statement, the Joint Foreign Chambers (JFC) strongly recommended an immediate announcement of a termination date for EO 839, concerned as it is about the open-ended nature of this price control with no specific "sunset" date.

The group said this leaves the oil industry and all those who depend on oil products in a state of great uncertainty for the foreseeable future.

EO 839 directed oil companies to retain the level of the retail price of petroleum products prevailing on Oct. 15, 2009 for the duration of the "state of emergency" in the entire area of Luzon.

JFC follows the positions taken by the Philippine Chamber of Commerce and Industry (PCCI), Management Association of the Philippines (MAP), Makati Business Club (MBC), and the Federation of Philippine Industries (FPI).

JFC said just like PCCI, it believes that the imposition of this price control will have both immediate and long term adverse impacts on the supply of petroleum products and future foreign investment in the sector.

It sees a reduction in supply to and availability of petroleum products in Luzon as importers will not sell at a loss. Luzon comprises 80 percent of the petroleum market.

The JFC said the price freeze would create arbitrage between Luzon and the Visayas/ Mindanao as there will be an incentive to direct currently remaining oil inventories in Luzon to be sold in the Visayas and Mindanao where the prices are higher.

It added that with potential forced losses in petroleum sales, the EO is a disincentive to any further investment in the sector which will affect future supply over the longer term.

"Price control may have to be used as a last resort to prevent profiteering by some unscrupulous firms and middlemen. (But) In the current situation, however, there is no evidence of profiteering by the oil companies," JFC said.

JFC even came to the defense and rescue of the oil companies which it said "demonstrated outstanding corporate social responsibility in various forms during the state of calamity in Luzon and, in particular, in keeping overpricing in check and bringing their damaged facilities quickly back into operational status to ensure continuity of petroleum supplies."

The JFC said the recent price increases in supply are a direct result of an increase in the import costs of the products due to recent increases in international prices which are set by oil exporting governments and global demand.

It added that the oil companies have been very responsive to assisting the population affected by the flooding in Metro Manila and other parts of Luzon and have provided substantial support in terms of products, people, equipment and money available.

In fact, it said, oil industry representatives initiated extensive discussions in good faith with the Departments of Energy and Justice in order to find ways to secure availability of petroleum products at fair prices in the affected parts of Luzon.

"The sudden, unilateral imposition of EO 839 has seriously undermined the future potential of these constructive joint efforts," the JFC said.

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