Pump prices moved closer to P100 per liter in Metro Manila, with the latest round of oil price hikes of P1.65 per liter for diesel, P0.50 per liter for gasoline, and P0.10 per liter for kerosene, taking effect at 6 a.m. on June 28.
With the latest round of increases, the Department of Energy (DOE) estimated that gasoline would sell from P79.04 to P97.84 per liter, diesel from P85.16 to P96.26 per liter, and kerosene from P89.72 to P99.12 per liter.
In an advisory, Chevron Philippines said Caltex would increase the price of Platinum and Silver gasoline by P0.50 per liter, diesel by P1.65 per liter, and kerosene by P0.10 a liter.
Petron Corp., Seaoil Philippines, Flying V, PTT Philippines, Phoenix Petroleum Philippines, and PetroGazz also raised pump prices to reflect the movement of prices in the world oil market.
World oil prices declined by $3 last week, but this was not reflected in local pump prices as the peso depreciated versus the US dollar and raised the cost of fuel by about P1 a liter, DOE officials said.
The peso sank to P54.985, the worst currency performance since Oct. 27, 2005, when it ended at P55.08 to a dollar.
Senator Sherwin Gatchalian, chairman of the Senate committee on energy, described the country’s oil situation last week as “quite dire,” noting that high oil prices may last until the end of the year, or worse, even longer.
“I heard from the CEO of Exxon Mobil that is looking for the next five years. Whether it’s at the end of the year or the next five years, we are seeing a $120 per barrel [cost and] elevated prices in the medium term. So… we have to be prepared to shield our transport sector from this elevated pricing,” he said.
“I understand that we cannot raise fares right away because it’s a balancing act,” he added, noting that raising fares would fuel inflation.
On June 21, the oil companies raised gasoline prices by P0.80 per liter, diesel by P3.10 per liter, and kerosene by P1.70 per liter.
This resulted in a net increase of P29.50 per liter for gasoline, P44.25 per liter for diesel, and P39.65 per liter for kerosene from the start of the year.
Senator Panfilo Lacson said the government should consider a conditional suspension of the excise tax on fuel to ease the burden of high fuel costs and make up for the lost revenue by removing the value-added tax (VAT) exemption on several products.
Lacson said the government should cut the lines of exemptions in the VAT, as the Philippines is the only country in Southeast Asia with more than 100 lines of exemption.
“We could have earned at least P117 billion in additional tax revenues in 2018 alone, even with a reduced VAT rate from 12 percent to 10 percent, by removing 78 lines of exemption from some sectors such as the power sector, cooperatives, housing, and economic zones,” he said.
“The VAT exemptions have been there for so long. It’s about time to review these lines of exemptions and reduce the number of exemptions,” he added.
Lacson said this would be better than proposals to give subsidies to poor and middle-income households–a measure that may strain the budget.
He noted a big chunk of the budget already goes to social welfare programs like 4Ps as well as subsidies for agriculture, micro-, small- and medium-scale enterprises.
“The budget may not be enough for these,” he said.
Meanwhile, House Assistant Majority Leader and Quezon City Rep. Alfred Vargas urged the concerned national agencies to immediately address the transportation crisis besetting commuters in Metro Manila.
“The shortage in public transportation has not been effectively addressed ever since the national government allowed businesses and commercial establishments to resume full operations,” Vargas said.
Vargas, chairman of the House committee on social services, said the shortage in public transportation is a burden on both workers and businesses.
“We have workers who have spent two years struggling to survive and businesses that barely stayed open. Now that the government has allowed businesses to resume operations, our workers struggle daily to get to work on time, and then go through the same ordeal to get home to their families,” he said.
The crisis also affects businesses, he said.
“When workers do not arrive on time and are too tired to work, it affects business operations as well,” he added.
Vargas also expressed concern that overcrowding in transport terminals and buses could be contributing to the rise in COVID-19 cases in the National Capital Region (NCR).
“The NCR is the country’s economic and business center. Any disruption in economic activities caused by a surge in cases will surely affect the economy and we cannot let that happen again,” he said.