High of P12.30/l for diesel, P7 for gas; staggered increase eyed
Oil companies are poised to jack up the price of diesel by an unprecedented P12.20 to P12.30 and gasoline by P6.80 to P7 a liter next week, prompting the Department of Energy (DOE) to appeal for a staggered increase to ease the shock on consumers.
The Department of Budget and Management (DBM), however, rejected growing calls for the government to suspend the collection of excise taxes on fuel products, saying it would cost the government some P117 billion in lost revenue.
Budget spokesman Rolando Toledo said the country’s economic managers are “strongly opposed” to proposals to suspend fuel taxes because this would hurt the country’s recovery.
Deferring excise taxes would reduce the cost of diesel by P6 per liter, gasoline by P10 and P5 for kerosene.
The economic managers instead favor “targeted relief assistance” such as a P3 billion fuel subsidy and discount vouchers for drivers of public utility vehicles.
These measures, however, would not help private motorists who must also bear the burden of skyrocketing gas prices.
As Russia’s invasion of Ukraine drove world oil prices high from March 7 to 10, the cost of imported diesel, gasoline, and kerosene rose by $36, $20 and $30 a barrel, respectively.
During the week, the price of imported diesel soared to an all-time high of $179.66 per barrel while gasoline reached $149.84 per barrel on Wednesday following the US and British announcement that they would no longer buy Russian oil to punish Moscow for its invasion.
Rino Abad, DOE director for the Oil Industry Management Bureau, said they hope the oil companies will heed their appeal to stagger the increase.
“We will meet with them every week. We appealed to them if they can stagger [the increases],” Abad said.
On March 8, the oil companies increased gasoline by P3.60 per liter, diesel by P5.85 per liter, and kerosene by P4.10 per liter.
These resulted in year-to-date adjustments of P13.25 per liter for gasoline, P17.50 per liter for diesel, and P11.40 per liter for kerosene.
Among the oil companies, Unioil Petroleum Philippines opted to stagger the price hike in two installments.
The DOE said it expects prices to remain high as the global oil supply continues to decline and demand remains strong. Prices will only fall when demand slackens or Iranian oil production returns quickly, the agency said.
For his part, Senator Christopher Go, a close aide to President Duterte, said he favored proposals for a temporary moratorium on the collection of excise taxes on oil products to help Filipinos cope with the price shocks.
While he acknowledged concerns over the possible impact on the government’s revenue collections, he emphasized that protecting vulnerable consumers should be the administration’s number one priority.
The lawmaker added that he would welcome a special session to tackle such legislative measures now that Congress is in session break.
He also called on the administration to speed up the release of the subsidy allotted to jeepney drivers, many of whom recently returned to pre-COVID operations in Alert Level 1 areas.
On Thursday, the Department of Budget and Management released a total of P2.5 billion to the transportation department as fuel subsidy for around 377,000 qualified public utility vehicle drivers. Another half billion pesos was also released to the Agriculture department to subsidize transport fuel cost of farmers and fishermen to mitigate possible increase in food prices.
Go said Duterte had already issued specific instructions to concerned agencies to address the rising oil prices.