Could NEDA look
into this anomaly?

His claim, we suspect, is based on a simple tracking of the prices of crude oil in the world market and the parallel movement of local curb prices. If at some point in the past, gasoline was selling at P26 a liter when global crude prices were around $55 a barrel, then the current prices should be at the same P26 a liter because crude is now selling now at around $55 a barrel. Gasoline is currently at P32. Ergo, there must be "overpricing."

Sounds reasonable, except there is no such animal called overpricing when every producer is free to sell at whatever price the market is prepared to accept, assuming, of course, there is full play of the forces of market competition.

The industry has long been deregulated and pricing of oil products is none of Recto’s or NEDA’s business.

But there is one odd development in the oil industry that is right down the alley of NEDA. The agency, as the economic policy making arm of the government, keeps track of economic and business developments so the government can respond in time to their possible adverse consequences.

We have this perplexing sharp drop in oil imports during the first quarter. Value was down 56.3 percent during the first quarter compared to the first quarter level a year ago. This is easily explained by the sharply lower cost of crude oil. But why the 32 percent drop in volume to 2.373 million tons? Perhaps smuggling is more widespread. If this is not the case, however, something is terribly wrong somewhere.

It is well that electric power generation is no longer dependent on oil. The drop in oil imports, thus, does not suggest a dangerous drop in power generation which, in turn, indicates a sharp downturn in production.

Oil nonetheless continues to power transportation. Is there a significant drop in the number of people commuting and the volume of goods being shipped from factories to retail outlets?

If there is, what does this mean in the context of the global economic slowdown whose effects the Philippines has yet to fully feel?

Perhaps Recto could assign a few of NEDA’s pedigreed economists to look into this anomaly. That’s more fruitful than carping about the oil industry’s alleged overpricing.