President-elect Ferdinand “Bongbong” Marcos Jr. prefers to provide aid to the sectors affected by the continuing increase in fuel prices instead of suspending the excise tax on oil.
This developed as oil companies raised pump prices across all products for the third consecutive week by as much as P3.10 per liter effective Tuesday to reflect the movement of prices in the world market.
At a press briefing Monday, Marcos said decreasing the excise tax on oil products does not help those affected by the soaring prices.
He said those who are directly affected, especially the transport sector, should be prioritized.
“I prefer to handle on the other hand of the equation and provide assistance to those who are in need. If you reduce excise taxes that does not necessarily help those who are most in need, those who are really affected,” Marcos said.
“So I’m thinking of giving assistance directly to those who are affected, those public utility drivers, let’s focus on them.”
“Those who can afford, they can afford to pay even the VAT, those whose livelihoods are in danger because of the increase of the oil prices, we should focus there,” he added at the BBM campaign headquarters in Mandaluyong.
“Phoenix Petroleum Philippines will increase the prices of gasoline by P0.80 per liter and diesel by P3.10 per liter effective 6 a.m. of June 21, 2022,” the company said in its advisory.
PTT Philippines, Cleanfuel, and Seaoil Philippines also announced the oil price hike.
World oil prices shot up amid the new US sanctions against Iran, increased demand from China due to the lifting of COVID restrictions, and supply concerns over the European Union’s ban on Russian oil.
Meanwhile, the Department of Energy (DOE) said the gasoline markets are sustained by strong regional demand, especially from Malaysia due to a scheduled turnaround at Petronas’ Melaka refinery and strong gasoline demand from Indonesia and Pakistan.
On June 14, the oil companies raised gasoline prices by P2.15 per liter; diesel by P4.30 per liter, and kerosene by P4.85 per liter.
These resulted in a net increase of P28.70 per liter for gasoline, P41.15 per liter of diesel, and P37.95 per liter for kerosene since the start of the year.
Rep. Luis Raymund Villafuerte of Camarines Sur appealed to the incoming Marcos Jr. administration to consider putting up a national strategic petroleum reserve (SPR) in the wake of rising fuel prices.
Villafuerte made the suggestion as domestic pump prices of fuel edged toward P100 per liter.
“Given the seemingly endless oil price spiral in the world market, one way for the incoming… administration to stabilize the retail cost of petroleum products—and shield consumers and motorists from the debilitating effects of sky-high prices of gasoline and fuel—is to put up a state-run storage facility that would enable the government to bring in additional inventory that could help soften future price surges,” Villafuerte said.
Villafuerte, who had broached the idea of a national fuel reserve more than two years ago, said energy officials have been talking about it for years, “but they have yet to walk the walk on this.”
“The long-talked-about fuel reserve plan has sadly crawled at a snail’s pace at the DOE as our energy officials have been taking their own sweet time putting flesh into this SPR.”
“As I have said before, they should be putting their money where their collective mouth is—rather than just emitting hot air with this blabbering (about studying a national fuel reserve plan) that only contributes to planet heating,” Villafuerte said.
Villafuerte said there seems to be no end in sight for oil price surges as experts list the upside risks in the months ahead as the drag on the global economy of Russia’s invasion of Ukraine; the weakening peso, which is now being traded at over P53 against the greenback; the easing of the lockdown in China; the EU ban on Russian oil imports; and the swelling demand for fuel in northern hemisphere states because of the summer travel peak period between June and September.
Energy Undersecretary Gerardo Erquiza Jr. said the increase to P100 per liter is possible, but this is unlikely to happen in a single weekly increase.
He said P100 a liter is possible if price increases will continue every day or every week but a sudden jump to that level was unlikely.
Erquiza renewed calls to amend the Oil Deregulation Law, a move supported by the Palace.
The amendments, pending in Congress, are unlikely to be passed, however, before President Duterte’s term ends, he said.
Despite the skyrocketing prices, Quezon City Rep. Alfred Vargas said he was optimistic that stability in the power and energy sector will help drive economic recovery.
“I am confident that given the declared priorities of the new administration, we can bring back stability and sustainability to the power sector,” he said.
Vargas said the government needs to bring in more investors to the power and energy sector in light of warnings from experts that the country faces an energy crisis.
He said the power outages in Luzon last Saturday, which affected an estimated 1 million residents, should be seen as a wake-up call.
Energy experts have warned of a looming energy crisis with the expected depletion of the Malampaya gas field in 2024. Malampaya supplies 30 percent of the energy needs of the Luzon grid.
Energy experts also estimate that the Philippines would need an additional capacity of 43 gigawatts by the year 2040.
“Instability in power supply is a roadblock to our economy’s revival, especially now that we are progressively reclaiming pre-pandemic economic growth. But I am confident that the President-elect’s administration has the resolve and competence to tackle and solve this problem head on,” Vargas said.