Another hefty oil price hike set

Published October 7, 2018, 12:26 AM By Myrna Velasco and Mario Casayuran

https://news.mb.com.ph/2018/10/07/another-hefty-oil-price-hike-set/

Brace for another round of bigtime fuel price surge.

This week, probably on Tuesday, the price of diesel, the main fuel used by public utility vehicles (PUVs), will surge to as much as P1.30 to P1.50 per liter, while gasoline price will increase by P0.80 to P0.90.

The Department of Energy (DOE) confirmed that the newround of price adjustment is set this week, a dreaded series of price hikes in more than two months already.

With the fuel price increase now on its ninth week, the Senate Ways and Means Committee has called on the DOE and the Department of Justice (DOJ) to form a task force to investigate unreasonable price surge in some provinces.

Probe price surge

Senator Juan Edgardo M. Angara, committee chairman, said the government should immediately take action on reports of unreasonable hikes in prices of petroleum products.

Based on media accounts, pump prices of gasoline in Odiongan, Romblon, have surged to as high as P71.17 per liter, and diesel at P57.46.

In Metro Manila, the average gasoline price is P58.90 per liter, and diesel at P48.35 per liter.

Aside from Odiongan, higher prices were also registered in Laoag, Ilocos Norte, where gasoline is at P62.70 per liter, and diesel at P49.90 per liter.

Kung palalampasin natin ito, posibleng dumami pa ang mang-aabuso. Dapat ay agad natin silang panagutin (If we let this pass, abuses would grow out of proportion. They should be held accountable),” he said.

Angara said that while no government agency is vested with the authority to control the price of petroleum in the country under Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998, the law provides for safeguards and remedies to protect consumers from abusive practices of oil firms.

Under RA 8479, “Any report from any person of an unreasonable rise in prices of petroleum products shall be immediately acted upon. For this purpose, the creation of DOE-DOJ Task Force is hereby mandated to determine within 30 days the merits of the report and initiate the necessary actions warranted under the circumstances.”

The law further states that the task force could investigate and file the necessary complaint with the proper court or agency.

“The task force plays a big role in holding erring businesses accountable especially since oil firms belong to a deregulated industry,” Angara said.

To ensure fair competition, cartelization – or any concerted action by refiners, importers and dealers to fix oil prices – may be penalized with a fine ranging from P1 million to P2 million and three to seven years imprisonment under the law, Angara pointed out.

Higher ‘Pantawid Pasada’

Given the incessant rise in oil prices, Senate Committee on Energy Chairman Sherwin T. Gatchalian is proposing that the government-sanctioned subsidy under the “Pantawid Pasada” program be increased to P6,000 a month per driver – an increase of more than 50 percent from the P2,542.00 monthly subsidy per driver previously announced by the Departments of Energy and Transportation (DOTr).

Under the expanded Pantawid Pasada subsidy scheme, the lawmaker also wants the tricycle drivers covered, not just those of jeepneys.

In last week’s trading, Dubai crude, which is the pricing benchmark for Asian markets had gone past US$84 per barrel level; but it eased at US$82.78 per barrel toward the close of trading week.

For Brent crude, it seesawed at the levels of US$84 to US$86 per barrel throughout last week; igniting higher probabilities that oil prices may really reach the restive US$100 per barrel next year.

With crude prices already breaching the US$80 per barrel trigger point as prescribed under the Tax Reform for Acceleration and Inclusion 1 (TRAIN-1) Act, Gatchalian said it is about time the government seriously weigh actions relative to the second round of increases in the excise taxes of petroleum products.

By January 1, 2019, the excise taxes for diesel will go up to P4.50 per liter from currently at P2.50 per liter; gasoline to P9.00 per liter from P7.00 per liter; and liquefied petroleum gas to P2.00 per kilogram from currently at P1.00 per kg.

“Definitely, we now have to talk about the TRAIN Law, we need to go forward with the TRAIN Law come 2019. We still have a second round, so this needs to be talked about and studied seriously,” Gatchalian said.

Wait for 2 more months

But Senator Aquilino Pimentel III said consumers would have to endure two more months of increasing oil prices before the government could halt the second round of excise tax on fuel products under TRAIN 1.

He said that the TRAIN 1 provides for the suspension of the fuel excise tax only when the average price of Dubai crude oil for three months reaches or exceeds $80 per barrel.
While joining the call for the suspension of the second round of fuel excise tax, Pimentel said the Department of Finance (DOF) cannot just stop its implementation.

“We have to wait. Two more months, if the increase in oil prices continues, the additional excise tax [on fuel] would automatically be suspended,”Pimentel, chairman of the Senate Committee on Trade, Commerce and Enterpreneurship, said in Filipino.

Mitigating measures

Malacañang, meanwhile, is keeping its fingers crossed that the recent administrative and memorandum orders signed by President Duterte will help ease the effect of inflation on the ordinary Filipino.

“We expect that these steps will help lower the price of goods in the market),” Presidential spokesperson Harry Roque said.

In a statement, Roque said that the Palace is aware that the rising prices of goods is taking its toll on the ordinary Filipino.

Roque then enumerated the recent measures taken by the government to address the issue of inflation.

Last month, President Duterte signed Administrative Order (AO) No. 13 to streamline procedures on the importation of agricultural products, including rice.

“This will lower the price of basic food products for Filipino consumers since certain administrative requirements unduly add to the cost of importation and limit food supply,” he said.

Duterte has also signed Memorandum Order Nos. 26, 27, and 28, which seek to stabilize prices of basic agricultural commodities at reasonable levels, maintain their sufficient supply in the domestic market, and provide effective and sufficient protection to consumers against hoarding, profiteering, and cartels with respect to the supply, distribution, marketing, and pricing of said goods.

On Thursday, President Duterte assumed full responsibility for the rising prices of oil and other basic commodities. He said he cannot make any excuse while explaining inflation to the people. (With reports from Vanne P. Terrazola and Argyll B. Geducos)