Congress urged to review oil price mechanism
LAST CENTAVO A tricycle driver searches his pocket for bills and coins to pay for fuel at a gasoline station on E. Rodriguez Avenue in Quezon City on Monday. Pump prices are increasing today by as much as P5.85 per liter for diesel and P3.60 per liter for gasoline. —NIÑO JESUS ORBETA (File photo)
MANILA, Philippines—An official of the Department of Energy (DOE) on Friday (March 18) urged Congress to review the pricing mechanism for fuel amid soaring pump prices in the local market.
“The root of all the problems is the pricing. I think Congress should also review the pricing mechanism,” Energy Undersecretary Gerardo Erguiza Jr. said in an interview with ANC about DOE plans to cushion the impact of any further increase in global oil prices.
“They have to see all the components because in so far as the department is concerned, the executive department, it is a deregulated regime and we cannot do anything, but since the problem is in the framework then we have to review the framework on the pricing,” he added.
Asked if a change in the mixture of fuel products can change the pricing framework, Erguiza said: “There is a law on that, on the mixture… As a matter of fact, in the past three years already, there is a problem in the implementation of that law, because there is a target that is supposed to be covered.”
“But since it’s the local or domestic supply that should be infused but is more expensive, that’s why they have allowed the utilization or importation of imported part of the mix. But in the suggestion and proposal of the DOE, this should be one of the things that should be reviewed also,” he added.
Earlier this month, Malacañang also called on Congress to review the Oil Deregulation Act, particularly its provisions on unbundling prices, minimum inventory requirements and giving the government power or authority to intervene when there is a spike or prolonged increase in prices of oil products.
Erguiza said embracing the electric vehicle industry is also part of the possible solutions to lessen the impact of fuel price spikes in the future.
“As a matter of fact, we have a law already that is pending for signature by the President, and the DOE before that has already prepared a framework for the institutionalization and putting up of infrastructure of electric vehicle charging stations,” he said, referring to the proposed Electric Vehicle Industry Development Act.
“So it’s there already, and once the law is signed we will be able to implement this immediately. The Department of Energy is also coming up with a hydrogen energy framework that will help sustain giving fuel to electric vehicles,” he noted.
Currently, local pump prices range from P70 to P80 a liter, depending on the grade.
On Wednesday, Energy Secretary Alfonso Cusi said that if the current trading trend is sustained, local prices could drop by at least P12 a liter for diesel and P5 for gasoline next week.
“We are really expecting a huge decrease next week but we still have to wait for the next two days… Hopefully with the trend, if it continues to be like that, then the price will continuously go down,” Erguiza also said.
RELATED STORIES:
Oil firms set biggest increase in fuel prices
Electric vehicles getting up to speed with the mainstream
TSB
