Gasoline prices are expected to go up P2.80 a liter on Tuesday as world oil prices surged following the decision of Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC) to cut their production of crude.
Unioil Philippines said in its advisory that fuel prices are expected to go up for the week of April 11 to 17 by P1.50 to P1.70 per liter for diesel and P2.60 to P2.80 per liter for gasoline.
Saudi Arabia and OPEC announced last week a reduction in the oil output by 1.16 million barrels per day to boost prices.
Senator Sherwin Gatchalian urged the government to prepare amid the expected global price surge.
“This event is unfortunate, and the government should immediately take actions that would cushion the impact… on the domestic economy, particularly since this would further intensify inflationary pressures,” said Gatchalian, vice chairman of the Senate Committee on energy.
Gatchalian said the Department of Energy (DOE) should immediately coordinate with industry players to ensure a sufficient and steady energy supply.
Senator Francis Escudero said the oil price surge would definitely affect the country’s recovery and would surely have inflationary effects.
He said the Department of Finance, the Bangko Sentral ng Pilipinas, the DOE, the Department of Trade and Industry, and the Department of Labor and Employment should meet and issue plans to cushion its impact.
In the meantime, the Philippines and the global economy continue to feel the effect of Russia’s invasion of Ukraine, Senator Imee Marcos said.
While oil prices are down from the peak of almost $120 per barrel fromFebruary to March 2022, which translated to local pump prices of almost P90 per liter of gasoline, local gas prices are still at almost P70 a liter, she said.
Analysts have forecast that the move of OPEC would increase local pump prices by as much as P3 a liter, possibly more.
In the short term, the government can look at government-to-government importation with countries such as India, China, and possibly Russia to avert the supply crunch.
Marcos said she filed SBN 187 to give the President the power to suspend the imposition of the 12 percent VAT on petroleum products.
Gatchalian also said the Land Transportation Regulatory and Franchising Board (LTFRB) should begin preparing for an efficient and timely implementation of the Pantawid Pasada program to subsidize public transport providers.
Based on the previous implementation of the program, he noted that itseffectiveness is hinged largely on the timeliness of its disbursement to targeted beneficiaries.
“To avoid delay in the disbursement of the subsidy and to ensure thedesired impact is realized, the LTFRB and other government agencies concerned should be ready to implement the program efficiently and should have learned the lessons from previous disbursements,” Gatchalian said.
Amid continuing volatility in oil prices, Gatchalian earlier filed Senate Bill No. 384, which seeks to institutionalize the Pantawid Pasada program given the need to set up an energy subsidy program to safeguard the public transport sector against oil price shocks.
In addition, Gatchalian said the DOE should also expedite the implementation of the Electric Vehicle Industry Development Act (EVIDA) to usher in the widespread use of electric vehicles (EVs) to ease the country’s dependence on imported oil in the long run.
On April 4, the oil companies raised gasoline prices by P1.40 a liter, diesel by P0.50 a liter, and kerosene by P0.20 a liter.
These resulted in a year-to-date net decrease for diesel at P3.65 per liter and kerosene at P5.35 per liter. But gasoline has a net increase of P6.05 per liter.
Gatchalian said adopting new technologies is necessary to ensure energy security amid expectations of stronger electricity and energy demand. He said this includes the development and production of batteries and other energy storage systems.
He also said the country should consider smaller modular nuclear reactors.
Gatchalian noted that the country is currently 50 percent sufficient in energy supply, imports 100 percent of its coal requirement to meet the rest of its electricity requirement and that the only source of natural gas is depleting.
On top of that, he said the demand for electricity increases by an average of 6.53 percent a year, in tandem with economic growth, which means the country needs to produce an additional 66,937 megawatts of power to sufficiently address electricity demand.