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NEWS UPDATES 8 November 2009

Shell sues Philippine govt over price freeze 

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Pilipinas Shell Petroleum Corp has filed an urgent petition with the Makati Regional Trial Court to order Malacañang, the Presidential palace which is the seat of the Philippine government, to lift Executive Order No. 839 freezing the prices of petroleum products in Luzon, reported the Philippine Daily Inquirer.

Shell asked the court to issue a temporary restraining order against the continued implementation of the order on grounds that it is unconstitutional.

It named as respondents Executive Secretary Eduardo Ermita and Energy Secretary Angelo Reyes, representing the Department of Energy-Department of Justice (DOE-DOJ) joint task force implementing the order.

On October 24, Malacañang issued EO 839 freezing oil prices at October 15 levels, as a means of mitigating the effects of a succession of typhoons that last month devastated parts of Luzon which remain under a state of calamity.

The oil industry, supported by big business groups, has strongly opposed the EO and called for its lifting, arguing that oil companies have been incurring losses because of the huge gap “between the cost and the pump price.”

Roberto S Kanapi, Shell vice president for communications, claimed the EO did not meet the conditions prescribed in the Constitution for determining the exceptional circumstances that would warrant the Chief Executive’s exercise of emergency powers.

According to the Shell petition, President Macapagal-Arroyo, through the EO, “unilaterally determined the existence of exceptional circumstances warranting the direction of the oil firms, including Shell,” in direct contravention of the Constitution.

It also disputed the EO’s premise that the President’s exercise of emergency powers was based on the Oil Deregulation Law. It said the Oil Deregulation Law was not the operative legislation in this case as “it does not contain reasonable terms and restrictions set by the Constitution.”


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