Fuel price drop next week seen as temporary
MANILA, Philippines — The large drop in local fuel prices expected next week may not be sustainable as the International Energy Agency (IEA) warned that the global oil supply would suffer a major cut once Russia’s petroleum stops reaching the market due to sanctions over its invasion of Ukraine.
For the first time this year, motorists can expect a rollback, and a hefty one, too, with diesel falling by as much as P11.70 and gasoline by P6.25 per liter, based on calculations by local oil companies on Saturday. Kerosene, mainly used as cooking fuel, could drop by an average P8.75 per liter.
The rollback, almost equivalent to the same price rise last week, is expected to take effect on Tuesday.
These rates are based on last week’s trading in the world market and in keeping with weekly price adjustments in the deregulated downstream oil sector.
Other factors that affect prices at the pump are the premium charges on petroleum imports, foreign exchange rate fluctuations and the biofuel components added to diesel and gasoline.
The IEA on Friday projected an oil supply crunch of 3 million barrels a day of Russian oil.
Hopes that talks between Russia and Ukraine would result in a positive agreement evaporated quickly last week, sending oil prices back above the $100 per barrel.
The IEA is an autonomous intergovernmental organization and serves as an information source on the oil market and other energy sectors, which helps countries respond to disruptions in the global oil supply.
It proposed a 10-point plan to ease the expected supply strain and trim the high prices of petroleum products.
The plan includes “car-free Sundays in cities,” working from home up to three days a week, avoiding air travel and practicing an energy-efficient lifestyle.
It noted that “immediate actions in advanced economies can cut oil demand by 2.7 million barrels a day in the next four months.”
One move to aid public transportation in the country got under way last week with the release of P569 million worth of fuel subsidies to drivers of public utility vehicles (PUVs) from the state-owned Land Bank of the Philippines.
Landbank said on Saturday that the amount had been credited to holders of “Pantawid Pasada” cash cards as of mid-March. It benefited 87,500 jeepney drivers with P6,500 each last week, the state-owned bank said.
Beneficiaries without cash cards can get them from Landbank branches identified by the Land Transportation Franchising and Regulatory Board (LTFRB). The cards are to be used to purchase fuel from participating fuel stations nationwide.
The total of P2.5-billion fuel subsidies will be distributed to 377,000 PUV drivers. Another P2.5 billion will be released in April.
The government had budgeted a separate P1.1 billion in fuel discounts for farmers and fishers.
Excise on fuel stays
A P2,400 a year cash aid to each poor Filipino household would need a total of P33.1 billion, which the government could source from excess value-added tax (VAT) collections from oil products, according to finance officials.
Part of that amount could come from an extra P26 billion in oil duties expected to be collected by the Bureau of Customs this year.
President Duterte’s economic managers had rejected calls to suspend the excise on oil products under the Tax Reform for Acceleration and Inclusion (TRAIN) Law because the government would lose P105.9 billion in revenue this year.
The government had programmed the collection of a total of P147.1 billion in taxes from oil products in 2022, P15.8 billion in VAT at the previous baseline estimate of global oil costing $70 per barrel, plus a fuel excise of P131.4 billion.
Jeepney drivers and operators said they were disappointed and frustrated over the LTFRB’s decision on Friday to deny their petition for a P1 provisional fare increase.
Orlando Marquez, president of Liga ng Transportasyon at Operators sa Pilipinas, said that when diesel prices dropped in 2018, groups representing jeepney drivers and operators voluntarily cut the minimum fare by P1.
“We just want them to bring back the P10 minimum fare, given the circumstances. This would have helped an ordinary driver to buy at least 2 kilograms of rice. Yet, they cannot even give that?” he said in an interview with the Inquirer.
More direct aid
Ricardo Rebaño, president of Federation of Jeepney Operators and Drivers Association of the Philippines, said the fare hike would have been the most direct form of aid for jeepney drivers since getting the P6,500 subsidy was troublesome.
One reason was that some operators were unavailable or uncooperative, which means that the drivers under those operators cannot claim the subsidy, he said.
Also, he said, if the jeepney had just been sold to another operator, the former operator remains on paper as the recipient of the fuel subsidy, and not the new operator.
“We are sad, and I have been telling my members that they can leave their jobs as drivers and look for another just so they can still have food on their tables,” Rebaño said. “I just hope that the transport officials we have will see the current state on the ground, so they can see firsthand the situation of our transport workers.”
—WITH REPORTS FROM BEN O. DE VERA AND DEMPSEY REYES
Big fuel price rollback next week, if trend holds
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