MALAYA EDITORIAL: TRANSPORT STRIKE, A BIG DUD
MANILA, SEPTEMBER 21, 2011 (MALAYA) 'There is nothing wrong with a deregulated market for oil products.'
THE transport strike on Monday called by left-leaning groups was a big dud. Let's make sure it stays that way – that no pressure group can hold the nation hostage over silly demands for repealing the law of supply and demand – by resisting any efforts to bring back price fixing for any commodity, however politically sensitive.
As we have been repeating here like a broken record, strikes and other forms of pressure politics only work when directed at issues where there is room for government intervention. Where there are none, as in the deregulated downstream oil industry, there is no fulcrum upon which strikers can leverage their organized but relatively weak forces to compel the government to act against the market.
The government's response to the strike call and the strike itself was well thought-out and well-executed. President Aquino met with transport leaders to assure them the government is doing its best to address rising oil prices. Government agencies, the police and the military arranged to field buses. On the day of the strike itself, policemen were on the streets to see to it that there was no coercion and harassment of drivers who continued to ply their routes.
The disruption and the inconvenience to commuters, as a result, was minimal.
If we have any criticism, it is on the government's seeming reluctance to be frank and open in rejecting any suggestion that there is some way by which oil prices could be lowered, save by removing or reducing taxes on oil products (which is out of the question given the government's need for revenues).
Officials should know quite well that those promises to look into price-gouging by and possible collusion among oil companies, for example, will lead to nowhere. The industry has been deregulated and any player can price his products anyway he pleases subject only to the penalty of losing his market to competitors. That's what the oil deregulation law says.
As to collusion in pricing, there is no need for representatives of oil companies to meet and come to an agreement to raise pump prices. Any player has only to watch what his competitors are doing and match their actions within hours to maintain the industry players' relative price alignments.
If there's any government prosecutor who wants to build a case of cartelization because of these normal market practices, he is welcome to do so and make a fool of himself.
What we are saying is that there is nothing wrong with a deregulated market for oil products. We wish the government could be as brutally frank in saying so. But we do understand the demands of politics.
Politicians can mouth all the pro-poor platitudes they want as long as they don't actually match their pie in the sky promises with actions that harm the market.
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Chief News Editor: Sol Jose Vanzi
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