PRESS RELEASE

ACT Teachers Rep. Antonio Tinio April 13, 2026

Tinio exposes replacement cost pricing practice: Oil companies rake in profits but pass business risks to consumers

House Deputy Minority Leader and ACT Teachers Party-list Representative Antonio Tinio revealed that under the replacement cost pricing practice, oil companies amass huge profits risk-free because they pass on risks to consumers rather than absorbing them.

During his interpellation at the Joint Committee hearing of the Legislative Energy Action Development (LEAD) Council on the energy crisis today, Tinio emphasized that “replacement cost” is not an inevitable or universal pricing model across fuel sectors. In fact, the LPG industry operates differently—where firms absorb losses when prices move against their inventory positions, rather than advancing costs to the public.

“Pinapalabas ng oil companies na ang replacement cost ang natatanging paraan sa fuel pricing, pero pinapakita ngayon na hindi naman ito universal,” Tinio said. “Sa LPG sector, monthly lang ang paggalaw ng presyo. Kapag biglang nagmahal ang presyo sa world market, hindi sila nagtataas kaagad ng presyo. Sabi ng LPG players, risk na nila yon. Sa oil, hindi ganoon. Dahil sa replacement cost model nila, pinapasa nila sa consumers ang risk na yon. Kaya lumabas, kinukuha sa publiko ang kapital para sa susunod na stock purchases nila.”

“Hindi universal ang replacement cost; business model ito ng oil industry na pabor sa kanila at pasanin ng publiko,” Tinio said. “Kailangang siyasatin kung ano ang puwedeng gawin ng DOE para pigilan ang modelong nag-a-advance ng singil sa mamamayan.”

Tinio added that it was “very revealing” when an industry representative indicated that using historic cost could be done, but the industry chose replacement cost to avoid “uneven” competition—underscoring that the model is a negotiated practice among players that favors firms while disadvantaging consumers.

“It’s revealing that the industry’s concern is the playing field among companies, not the burden on consumers,” Tinio said. “If the model can be different, then government must evaluate what regulatory steps can be taken so the public is not always punished first whenever prices spike.”

“Tulad ng Oil Deregulation Law, malinaw na ang replacement cost pricing ng oil industry ay pahirap sa mga jeepney driver, magsasaka, mangingisda at mga ordinaryong consumer. Hinahamon ng ACT Teachers Party-List ang Kongreso at Marcos administrasyon na agarang ibasura ang mga ito, at agarang tanggalin ang excise tax at VAT sa langis, at magpatupad ng price control sa presyo ng langis. Dagdag pa rito, dapat nang ipasa ang HB 8766 o ang Repeal Oil Deregulation Act at iba pang oil-related measures na pinanukala ng Makabayan Bloc para maprotektahan ang mamamayan laban sa pang-aabuso ng oil companies,” ended Tinio.