A LAWMAKER from the progressive Makabayan bloc is proposing that the national government buy back Petron Corp. to help control the continuous hike in oil prices, which has been prompted by increasing global crude oil prices.
“Petron Corporation which used to be state-owned and controlled, is currently the largest and the only publicly listed oil refining and marketing company in the Philippines and it would have a significant effect in mitigating oil price hikes,” said Bayan Muna Rep. Carlos Isagani T. Zarate in a statement.
Mr. Zarate pushed for congressional consideration and approval of House Bill 244 or the proposed Petron Renationalization Act.
Under the bill, the Philippine National Oil Company (PNOC) should acquire a majority stake or 51% of subscribed stocks of Petron upon the first year of its effectivity, if signed into law.
The PNOC should reacquire 100% full ownership of the company within a period of four years. This will mean that Petron would have to delist from the stock exchange once the government takes full stake of the company.
Reacquisition funds will be sourced from annual budget appropriations. Secondary funding can also come from the earnings of the PNOC from its increasing stake of Petron during its reacquisition.
In the first year of the law’s effectivity, P4 billion would be appropriated for the initial repurchase of Petron stocks by the government.
Following the proposed takeover, Petron should adopt a pricing policy to keep its crude oil and petroleum products sold to consumers as “socially and economically viable as possible” and to raise and promote the local capacity for exploration and development of petroleum, among others.
Petron was initially privatized in 1994 through a deal with PNOC and the Saudi Arabian Oil Company through a stock purchase agreement which gave a 40% stake of the company to the oil producer.
The industry was deregulated through Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 in a bid to stabilize and provide reasonable oil prices and encourage competition and investment in firms, among others.
Local fuel prices will increase on Tuesday for the seventh consecutive week.
Domestic diesel prices had a total increase of P15.00 per liter year-to-date while gasoline also hiked by P16.55 per liter, according to data from the Department of Energy.
BusinessWorld has reached out to Petron for comment on the proposal but has yet to receive a response as of posting time.
Shares in Petron went up by 4.72% or 16 centavos to finish at P3.55 per share on Monday. — Russell Louis C. Ku