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Thursday, February 29, 2024

Sigh of relief: Fuel prices rolled back next week

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Consumers can heave a sigh of relief next week as fuel prices are expected to go down after 11 consecutive weeks of increases, according to the Department of Energy and industry sources.

Oil firms are expected to cut the price of diesel and kerosene by P0.50 to P0.75 per liter, while gasoline may have no price movement or a possible rollback of up to P0.15 per liter, sources told Manila Standard.

DOE director for the Oil Industry Management Bureau Rodela Romero said, however, that gasoline may still increase depending on the movement of oil prices in the world market on Friday.

“After the series of increases in the prices of petroleum products, we will be expecting mixed movements based on the 4-day trading rate,” Romero said.

“This adjustment is attributed to the warning of the US Federal Reserves on higher interest rates, although expectations of tight supply still presented a positive outlook for crude,” she said.

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On Sept. 18, local oil companies implemented an increase of P2 per liter for gasoline and kerosene, while diesel prices rose by P2.50 per liter.

These adjustments resulted in a year-to-date net increase of P17.50per liter for gasoline, P13.60 per liter for diesel, and P9.94 per liter for kerosene.

Meanwhile, fuel subsidies under the national budget will help the most affected sectors in coping with the price increases, said Senator Sonny Angara.

He sees the fuel subsidies being provided to the transport sector as a key intervention of the government to help the operators and drivers cope with the rising fuel costs.

A total of P3 billion is available this year under the General Appropriations Act for transport fuel subsidies, which will go to some 1.36 million beneficiaries.

Also, Terry Ridon, convenor of the Infrawatch PH think tank and former House energy committee member, said President Ferdinand Marcos Jr. can order the suspension of value-added taxes (VAT) and excise tax on petroleum products to ease the burden of the transport sector.

Ridon said that if both VAT and excise taxes on fuel products are suspended, current fuel prices will revert to petroleum prices experienced in March to April 2023, with generic gasoline prices as low as P54 per liter (March 23), and generic diesel prices as low as P51.95 per liter (April 23).

“This affords the public the space to prepare for graduated price adjustments in the event the suspension is lifted, when new fiscal measures are implemented to more adequately respond to price volatility in the international oil market while balancing revenue and public impact,” he said.

Under the fuel subsidy program, P10,000 will be provided to each of the drivers of modernized public utility vehicles (PUVs); P6,500 to drivers of traditional four-wheel PUVs; P1,200 to delivery riders, and P1,000 to tricycle drivers.

“With pump prices going up for 11 straight weeks, the PUV drivers have to bear the additional costs and deal with lower incomes. This could mean more hours on the road and less food on the tables of their families,” said Angara, chairman of the Senate Committee on Finance.

Under the 2024 National Expenditure Program, the executive branch has proposed P2.5 billion for fuel subsidies to the transport sector.

The senator said it is not the first time that fuel subsidies were provided to the transport sector.

He recalled that in 2022, P2.5 billion was allocated to the Department of Transportation for this purpose. In the case of the 2023 GAA, Angara said the same P2.5 billion was proposed by Malacañang but Congress increased this by P500 million.

“Now that the Commission on Elections has officially exempted the distribution of the fuel subsidies from the ban on spending during this election period for the 2023 barangay and SK polls, there should no longer be any reason for delay in the full implementation of the fuel subsidy program,” he said.

“Assuming all of the requirements have been met and the recipients have been identified, we urge the Landbank of the Philippines to fast-track the downloading of the fuel subsidies to the intended beneficiaries,” Angara said.

Apart from the P3 billion for the transport sector, Angara said P1 billion had been earmarked in the 2023 GAA for fuel assistance to farmers and fisherfolk.

Of the P1 billion, P510.4 million was placed under the Office of the Secretary of the Department of Agriculture for fuel assistance to farmers, while P489.6 million was placed under the Bureau of Fisheries and Aquatic Resources for the fisherfolk.

This would benefit 312,000 farmers and fisherfolk to help them sustain their production and operations. In 2022, the Department of Agriculture was provided with P500 million for the fuel assistance program.

This was increased to P1 billion this year and for 2024, the same amount was proposed for the program. Alena Mae S. Flores and Macon Ramos-Araneta

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