President Ferdinand Marcos Jr. on Tuesday ordered the shortening of the trigger period for the release of fuel subsidies—from three consecutive months to only one month that the Dubai price per barrel exceeds US$80.
Mr. Marcos issued the directive during a review of the mitigating measures for high fuel prices in a sectoral meeting at the Palace on Tuesday, Energy Secretary Raphael Lotilla said.
Lotilla said the President also ordered agencies to simplify the release requirements as it took time to release the funds for fuel subsidies in the past.
Department of Energy data showed Dubai crude was at $92.35 per barrel as on Monday. It has remained above $80 per barrel since August.
The country’s oil firms hiked pump prices yesterday by P0.95 per liter for gasoline, P1.30 per liter for diesel and P1.25 per liter for kerosene. The price adjustments resulted in a year-to-date net increase of P13.20 per liter for gasoline, P12.65 per liter for diesel, and P7.19 per liter for kerosene.
“The President gave instructions on changing the language of the 2024 budget provision on fuel subsidies for the transport sector in orderto shorten the trigger period from three months to one month and simplify the release requirements,” Lotilla said in a press briefing.
“It will shorten the period within which the subsidy can be released to our drivers. Because before, it would take three months, and thedifference is quite obvious in terms of being able to help the transport sector,” he added.
As for the fund release requirements, Lotilla said under the existingpolicy, the Department of Transportation must first consolidate all the lists of beneficiaries given by the Land Transportation Franchising Regulatory Board, the Department of the Interior and Local Government, and the Department of Trade and Industry.
“We are simplifying all these requirements so that the Department of Transportation will be responsible for the list for those which are under the LTFRB, then DILG will come up with the list for those which are with the tricycle drivers under the local governments and then, DTI will take care of the rest. And that will simplify the process,” Lotilla said.
“So, this time, as proposed by the Department of Budget and Management to Congress, the guidelines will need only to be agreed upon by the Department of Budget and Management, the Department of Transportation, and the Department of Energy. And these can be released upon the finalization of the list of beneficiaries,” he added.
The administration is seeking funding of P2.5 billion for fuel subsidies in 2024.
The President also approved a proposal to raise the ethanol blend for gasoline products to 20 percent from the current 10 percent by the end of the year, Lotilla said.
He said the implementation of a higher ethanol blend to gasoline is “voluntary” in an effort to further pull down gasoline prices.
“This is primarily a price mitigation measure because ethanol,especially imported ethanol, is cheaper than the price of gasoline.
The utilization of the higher share of ethanol will result in lower pump prices because of the increased blend,” he said.
“Right now, the price of gasoline without ethanol is around P56.89. It will result in a price differential of around P1.28 or up to even P1.50, depending on, of course, the prices. The local ethanol price per liter is currently around P79.49, which is higher than the imported ethanol which is at P41.44,” Lotilla added.
The President is also eyeing the increase in the coco methyl ester or the coco biodiesel blend from the current 2 percent to 3 percent.
During the sectoral meeting, Mr. Marcos also directed concerned government agencies to work on the continued electrification of the transport sector, particularly mass transport and light cargo vehicles.
Lotilla said the President also underscored the need to have charging stations for electric vehicles as well as to prepare the economy for the eventual manufacturing of EVs.