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Oil firms set biggest increase in fuel prices

Tricycle at a gas station. STORY: Oil firms set biggest increase in fuel prices

HARDEST-HIT | Tricycle drivers, who depend on their meager daily earnings to feed their families, are among those feeling the pinch of rising fuel prices. (MARIANNE BERMUDEZ / Philippine Daily Inquirer)

MANILA, Philippines — Local pump prices of gasoline and other petroleum products are rising at a pace never seen before and the Department of Energy (DOE) has warned consumers to brace for bigger increases.

The DOE on Monday called on oil companies to help the public by continuing to provide discounts to motorists and staggering their increases.

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The DOE is also thinking of other ways to provide temporary relief to consumers, whether in relation to liquefied petroleum gas (LPG) or other petroleum products, according to assistant director Rodela Romero of the department’s Oil Industry Management Bureau.

Romero said a bigger adjustment could be expected because of the ban on Russian oil imports due to its invasion of Ukraine, which will constrict supply and push oil prices higher.

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On Monday, oil companies indicated that the increase in pump prices this week would be the biggest so far this year.

In separate advisories, oil firms Caltex, Petron, Seaoil, Unioil, Petro Gazz, Flying V, Clean Fuel, and PTT on Monday said the price increase for diesel would be P13.15 a liter, P7.10 a liter for gasoline and P10.50 a liter for kerosene, effective midnight Tuesday. This would bring local pump prices to as much as P84 for diesel and P94 for gasoline.

Compared to last year, motorists will now be paying P31 more for a liter of diesel, P20 more for a liter of gasoline, and P25 more for a liter of kerosene. Prices of LPG also rose by P7.95 a kilo this month.

At the Laging Handa briefing, Romero appealed to oil companies to continue offering discounts to some motorists as part of their corporate social responsibility and delay the implementation of the increases to ease the burden on consumers.

“Hopefully, the members of the industry will listen so that our burden will be lightened even a bit,” she said.

The government has also been providing fuel subsidies to public transportation drivers and operators amid the successive fuel price hikes, she noted.

There have also been calls for a fare adjustment as well as for the suspension of the excise on fuel products to cushion the impact of the price increases.

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Additional fuel subsidy

However, Department of Finance (DOF) Undersecretary Valery Joy Brion reiterated during a Senate hearing on Monday the DOF’s position that oil taxes could not be suspended as it would slash revenues needed to finance the economy’s rebound post-pandemic.

“This will be detrimental to our recovery and long-term growth. However, the government remains ready to provide targeted relief assistance and support to address the impact of the oil price hike on affected sectors, especially the PUV (public utility vehicle) drivers, farmers, and fisherfolk,” Brion said.

The DOF earlier said that suspending oil excise would deprive the government of up to P147.1 billion in revenues this year.

But with more expensive oil, the government has so far generated P3 billion in excess value-added tax (VAT) as of end-February, which will fund the additional fuel subsidies to public utility drivers and discounts to be given away this month and next.

Most affected

Jeepney drivers have been losing P8,400 a month from the oil price hikes since January — months before the Russia-Ukraine crisis even began, a transport group said on Monday, as they called on President Rodrigo Duterte to suspend the tax on oil and head off runaway inflation on other commodities.

And once the increases in pump prices kick in this week, drivers would continue to lose P362 a day to cover their fuel costs, said Mody Floranda, president of the transport group Piston.

Other sectors, including farmers and fishers, also expressed concern that the nonstop hikes would worsen hunger and food insecurity across the nation.

Kilusang Magbubukid ng Pilipinas official Danilo Ramos said that whenever prices soar, “it is always the poorest who pay the dearest. Now, even farmers cannot afford to buy food due to lack of income. More Filipinos will go hungry.”

Undersecretary Rowena Guevara of the Department of Science and Technology (DOST) called for energy conservation measures amid the oil price increases.

“Our first line of defense in the worldwide increase of oil prices is to reduce consumption,” she said.

Technology could be used to keep tabs on the energy consumption of buildings.

These include cloud-based monitors and e-sensors that would determine how much energy buildings consume and where it is wasted, she said.

If people do not understand how energy is consumed, they would not be able to conserve these properly, she pointed out.

As for electric vehicles, which are being touted as an alternative, she said more charging stations would be needed.

The DOST has been putting up charging stations in the provinces using the Charging in Minutes or CHARM technology developed by the department, Guevara said.

This allows the battery of an e-vehicle to be charged in 30 minutes, down from eight hours, she said.

More measures

Using electric vehicles would help consumers avoid high oil prices. These are also better for the environment as they do not produce harmful emissions, she said.

In an interview with CNN Philippines on Monday, Energy Secretary Alfonso Cusi said President Duterte has scheduled a meeting today (Tuesday, March 15) to talk about additional measures that the government could employ to cushion the impact of the rising fuel costs.

The secretary also met with the country’s major oil players on Monday afternoon to request that they impose the fuel price hikes on a staggered basis.

“We will be asking industry players to take a cut and reduce their industry take,” he said.

In a statement, Sen. Sherwin Gatchalian said the DOE must intensify its price monitoring activities as pump prices continue to skyrocket. Profiteers may use this as an excuse to slap exorbitant markups at the expense of Filipino consumers.

He added that oil refiners should sell their 30-day worth of oil inventories at old prices to lessen the impact of the series of fuel price hikes, now on its 11th consecutive week.

Cusi especially noted that the price of LPG has gone up to P1,000 per tank from P600. Household budgets are expected to be strained by this as LPG is considered an essential fuel commodity for cooking, heating, and lighting.

To help, Cusi said the DOE would ask economic managers if it was possible for the government to subsidize P3 per kilo of LPG.

Cusi said consumers must “prepare for the worst and hope for the best” as the current oil supply crunch is beyond the country’s control, being heavily dependent on imports.

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TAGS: ban on Russian oil imports, fuel prices, oil prices, Russia-Ukraine war
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