Senator wants to limit oil companies' profits

Another st*p*d proposal from the left wing senator. Hindering capitalists from making money will make them flee. Lost jobs, lost tax revenue eventually. Why do these idiots get elected anyway?

Grow up Senator Trillanes! Don't waste our time. Go back to Mindanao! You're better off there!

People must understand that we do not "produce" oil but merely import it. Hence, the oil prices are affected by the following factors:

1. Purchase/Acquisition Costs of the Oil (includes but is not limited to market value of oil, currency fluctuations and futures market)
2. Shipping Costs and relevant taxes (outbound/inbound)
3. Processing & Operational Costs (fuel, electricity and water consumption to name a few)
4. Maintenance Costs (repair of equipments/vehicles)
5. Infrastructure Costs (service stations, pipelines etc)

Now say we limit it to 12% profit? Then everyone's prices would be practically the same at 12% profit, there is then no need for multiple oil companies.

What we should avoid is a false sense of open and free market for oil companies and then suddenly be faced with a pricing scheme regulated between the oil companies so that their retail value is always similar/the same. (A sample is how LCD manufacturers controlled LCD prices so that they could reap hefty profits).

But to suddenly go and limit profit for the sake of saying "you are doing something" is wrong. How do we go about upgrading then from Euro 2 to Euro 5? Developing/importing technoligies to support infrastructure on new green energies such as hydrogen/ethanol if in case these become the norm? Who then should shoulder the costs? Is that 12% Going to cut it or will the government hand out the cash for free?

If we limit it to 12% as dictated, what if these companies then cry against compliance to meet global standards for clean emissions/fuels? It goes around and bites you for imposing control without thinking ahead.

Why not simply try and look at removal/reduction of e-VAT against fuel? Instead of 12, can we go with 6%? I know we cannot completely remove it because the government is dependent on the funds received from it to its operations/finances, but if we reduce it, will that cripple to government?

Just a thought. Remember, businesses are meant to earn. If they can not earn, they why go into business? Will the government step in to operate every single one of these service stations and the equipments and deal with imports, etc if all these companies suddenly opt to stop?

Do you guys even know how much a service station earn per liter when you top up? I heard from a station owner/operator it was about 1 peso per liter! Each vehicle approximately tops up about 30 -40 liters @ full tank. At just 1000 pesos worth of fuel, they could just be earning about 20 pesos if it is diesel, about 18 pesos if it is unleaded.

So how do we go about paying for costs of operations alone of paying salaries, elec and water consumption of the service station? Would people be open to a self service type of arrangement for gas station? Problem then would be, can majority of people be able to operate these self service type terminals using credit cards to reduce the overhead costs of the stations? How about then for those without credit cards? They are all stuck to the pumps nearest the cashier/convenience store and we will have a very long line, quite possibly, along those pumps.

maganda na yan kesa naman sa mga nakaupo nga wala naman magawa para sa bayan.. meron ding nagka lakas ng loob para kumilos,hindi puro reklamo wala naman ginagawa.

@17Sphynx17 - Good explanation. I bet you are a researcher. But I think there is another attention from Trillanes why he filed the Senate Bill 2529. Of course if I were the Oil company owner I will take the bill as a hindrance for the success of my company. Then to make Trillanes defer or rescind the Senate Bill owner will surely paid personally (you can call it "under the table") or may be supporting Trillanes soldier in what ever will they do at future Mutiny. Hehehe... this is only my perspective. PEACE :)

st*p*d law by a st*p*d senator. Anybody agreeing with this should first read the fundamental laws of economics and then you will realize how bad this is going to affect our economy.
FYI putting a ceiling on profit based on capital is st*p*d beyond measure, since it will mean that companies won't earn anything which will lead cutting of expense, ergo jobs.
GO UNEMPLOYMENT!

haynako itong trillanes nato tlga.. kung wala kang masabing maganda, manahimik ka nalang kesa naman magsabi ka ng kung ano-ano para lang kunyari may ginagawa ka e wala namang kabuluhan pinagsasasabi mo.. hndng hnd macocontrol ang mga oil companies.. tapos sasabhn mo pang ung excess na tax e pupunta sa gobyerno para makatulog sa mga tao? ausin nyo kaya muna ung CORRUPTION sa gobyerno bago kayo magsabi ng "...greed of petroleum companies and provide much-needed relief to our overburdened citizens". Greed nyo muna asikasuhin nyo

There should be TRANSPARENCY naman kasi. Its not the profit limiting that is important. They should come up with a law that would have to make everything the oil companies do transparent to the public and that includes all the financial books and the computations as to how they come up with their prices. Or maybe the government can open up a state-owned gas company which sells gas at the real, transparent prices? If so the government could earn a bit more and the other companies would be compelled to drop their prices.

The solution here is not imposing a profit limit. I think the best solution is to have a fix peso value for the VAT on fuels. Because now at 12% it means if 1 liter of Unleaded is 50 peos and the VAT is 5.36. meaning the oil company was actually selling it at 44.64. so if you think about it. every time u fill up your tank lets say 30 liters worth of fuel approx. 160 goes to the Government. (Only God knows where it really went). Moreover, VAT is a percentage thus if the base is higher the higher the VAT. Gov't is actually happy that fuel prices are going up since they get more VAT money. The real solution is to have a FIXED VAT on Fuel prices. Make it Absolute. Lets say 3 pesos per liter. so that even if the oil companies raise their prices, the VAT portion doesn't grow also but is fixed. This will minimize the impact of the price increase. But this is a long shot. The Government wants to get as much money from its hard working citizens so they can have all those Luxuries that their salary won't be able to pay for.

If I may add also, people here do not also yet consider than there is a merchant charge/service fee for the service station every time you use a credit card in transactions. This can vary from 3% or 6% against the gross value swiped. Keep in mind, GROSS, not NET on profits. I am not sure if this is fixed or if this is waived by the credit card companies, but this was also an issue with the american credit card companies, whether the card should charge a fixed service charge fee instead of a percentage fee. Swiping for 1000 pesos and 5000 pesos will be charged a fixed service fee instead of a percentage rate as same "labors" are executed for a single transaction by the bank.

the only reason for all of this is our continued dependence on fossil fuel. but what amazes me is this; petroleum products in the philippines are far more expensive than our neihboring country's. no matter what mathematical equation is to be thrown with any existing principle in economics to support it , the truth remains " overpricing ang mga gasolinestations dito". the government should intervene otherwise this problem will soon be a thing of normalcy. una: alisin na ang oil deregulation law. deregulation freed the government from its obligation to subsidize the oil price stabilization fund ( its main purpose Is to dampen situations resulting to fuel/ oil price hike) .this suggestion from the senator is just a duplication , when fuel prices are regulated at 12% per annum of capital employed.

Trillanes for president? NO WAY:))

... which is why transparency on the part of the companies' computations would've been helpful. but 17Sphynx17 is right in saying that a profit ceiling would drive the companies away. If our taxes had been spent better, overall taxes could be lowered and make oil prices less of a burden. But of course that's bordering on utopian for us. What if Trillanes buys back Petron and sets the prices himself so he can see how it's done? But then the whole situation won't be competitive anymore and everyone else in the private sector will just go gone.

ayaw pa kasi gawin tax free yung mga hybrid vehicles eh para mabawasan yung consumption ng gasoline. yun lang electricity naman tataas pero may paraan din naman yun eh. solar chargers! hehehe

What do you expect from a military man who raided a hotel and put bombs at a mall because he wanted to show disgust over an administration? radical ideas and this is one of his radical ideas. Hindi ito makakalusot dahil maraming magrereklamo na companies at baka mag si-alisan pa.. mr senator isip pa ng ibang paraan!

The Bill is essentially a tax measure. It's not a police power measure that attempts to limit profits up to 12%. The Bill does not say that gasoline companies can only mark their costs up by 12%. If it does, then that is curtailing property rights without due process. What it does, however, is tax excess profits, presumably at a higher tax rate than the current one. A possible argument against this is violation of the equal protection clause. A counter-argument would be that gasoline companies are in a different class of business.