Priced Locked Fuel

Oil’s Big Three - which sell nine in every 10 liters of fuel in the country - have been urged to follow the lead of Sea Oil Philippines Inc. in selling price-lock prepaid cards to consumers.

Opposition senator Francis Escudero issued the dare to Petron, Pilipinas Shell and Chevron Philippines, which operates the Caltex brand, a week after Seaoil launched the industry-first prepaid card which locks the price of gas for a given time.

Escudero said if a “small player in a small country ” can offer a product that shields consumers from price spikes ” then there’s no reason why this can’t be done by energy giants whose mother companies have been recording super profits”.

“If a scrawny new kid on the block can make the generous offer then oil companies with bigger financial muscle can do no less, “Escudero said.

To be sold between June 10 to 21, Seaoil’s prepaid fuel card can buy 20 liters of gasoline (G5 X-treme and Unleaded) from any of the oil firm’s stations.

At a “locked” price of P53.50 per liter, each card costs P1, 070 and is valid for 11 weeks or from June 10 to Aug. 22.

In the less likely event of a price rollback during the period however, company officials said they will refund the difference.

“This is the beauty of the Seaoil promo. The card price is fire walled against global price increases but if global prices go down Seaoil will give out refunds. For the motorists, there is no win-win offer than that,” Escudero said.

Seaoil has 102 stations all over the country, a drop in the barrel compared to Petron’s 1,200; Shell’s 800; and Caltex’s 850. The three combine for 2,850 out of the 3,369 registered fuel filling stations in January 2006.

In calling for the replication of the Seaoil promo, Escudero particularly directed his appeal to Petron, which remains 40 percent owned by the government until the sale of the latter’s stake to a British holding company becomes final.

“This is one form of imitation that Petron must have no qualms in doing because it serves the public interest and also makes good business sense, “he said.

He said Shell and Chevron “can also initiate a variant” of the Seaoil prepaid card “and they cannot plead poverty in not doing it.”

“Pilipinas Shell is part of a global conglomerate which posted a 25-percent hike in profits in the first 90 days of the year , or $9 billion while local Caltex’s mother company , Chevron, reported a 10 percent hike in profits, or $5.2 billion for the same period, ” he said.

Philippine Senate Press Release