MANILA, Philippines — Leaders of farmer and transport groups on Friday sounded the alarm on a threat “worse than the pandemic”—the steady rise in oil prices and the absence of government safeguards for marginalized sectors.
At a press conference at the University of the Philippines (UP) Diliman, Anakpawis national president Ariel Casilao warned that the spike in oil prices in the past eight weeks would result in price increases for basic commodities, food, and services.
Casilao, a former lawmaker, urged the government to push for a price control law or resolution to pull down oil prices, and said the excise imposed by the TRAIN law (Tax Reform for Acceleration and Inclusion) should be repealed.
He said Energy Secretary Alfonso Cusi had neglected the increasing trend in oil prices even when these spiked by 32 percent last April.
Elsewhere, the public policy think tank Infrawatch PH called on President Rodrigo Duterte to suspend taxes on petroleum products until global oil prices had stabilized.
“The President in several instances has never shied away from undertaking executive action for the public interest,” said Infrawatch PH convener Terry Ridon. “There is nothing that can prevent [him] from undertaking executive action to address rapidly rising petroleum prices during this period of price volatility.”
Among others, Duterte can order the suspension of both value-added and excise on petroleum products to control the current price volatility, Ridon said.
Domino effect
At the UP Diliman forum, Rafael Mariano, a former agrarian reform secretary, pointed out that the rising oil prices had a “domino effect” on farmers who would now have to cope with higher production costs.
“Many of our farmers use private irrigation, water pumps, and oil-based fertilizers. With increased production costs, low values for their crops, and a spike in transport costs, their yield would not be profitable for them,” said Mariano, chair emeritus of Kilusang Magbubukid ng Pilipinas.
The transport sector is also grievously affected, with thousands of drivers and operators losing their livelihoods starting in March 2020 due to the pandemic, said Piston national president Mody Floranda.
“Under the law, if the global crude oil prices topped $80 a barrel, price control must be set. This week, the prices reached $95 per barrel. It is only right to set price control on petroleum products now, or the prices will continue to soar weekly,” Floranda said.
Nolan Grulla, UP Transport Group spokesperson, said jeepney drivers had already been grappling with the government’s modernization program and the 50-percent capacity limit on public utility vehicles ( PUVs).
“Because we follow the protocols of the government—or we’ll be arrested—we earn only P200 a day on average. One trip would cost us more than P50 in fuel, but we earn only P84,” Grulla said.
With the incessant oil price increases, he said, it had become harder for them to afford the loan of P1.6 million to P2.4 million to modernize their jeepneys, which would require them to shell out some P2,000 a day.
On Monday, the Department of Transportation and the Land Transportation Franchising and Regulatory Board committed to push for financial aid to displaced PUV drivers to prevent direct fare increases.
Public can’t wait
Assistant Transportation Secretary Mark Pastor said the two agencies were coordinating with the Department of Energy for a “uniform discount” for PUVs, particularly jeepneys, in all gas stations nationwide, as well as the grant of fuel subsidies to drivers.
But the farmers and transport groups demanded a more permanent solution from lawmakers, such as legislation to regulate the oil industry.
But Ridon said the public “cannot wait for new legislation to address problems requiring urgent solutions.”
From August to October, oil prices spiked between 7.02 percent (for high-octane gasoline) and 15.61 percent (for diesel) compared to only 0.21 percent and 3.97 percent from June to August.
Ridon noted that the current price volatility in the global market began on October 4 to October 6, when Dubai crude prices rose by 8.38 percent.
He said a suspension of taxes on petroleum prices would immediately lead to a 25-percent cost reduction, assuming gasoline prices at P70 per liter.
Based on Infrawatch PH estimates, the proposal will help revert current fuel prices to their average price in the last four months, with generic gasoline prices ranging between P45.10 per liter (June 22) and P45.80 per liter (Aug. 26) and generic diesel prices ranging between P36.5 per liter (June 22) and P36.6 per liter (Aug. 26).
“This affords the public the space to prepare for graduated price adjustments in the event the suspension is lifted, when new fiscal measures are implemented to more adequately respond to price volatility in the international oil market while balancing revenue and public impact,” Ridon said.