Consumers get relief as oil firms cut down prices of fuel | Inquirer News
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Consumers get relief as oil firms cut down prices of fuel

Jeepneys in Baguio City. STORY: Consumers get relief as oil firms cut down prices of fuel

WAITING GAME Jeepneys plying different routes in Baguio City and nearby areas wait for passengers. Motorists can expect a big fuel price rollback this week with diesel falling by as much as P11.45 per liter and gasoline by P5.45. —REM ZAMORA

MANILA, Philippines — Consumers are finally getting some relief after 11 weeks of uninterrupted fuel price increases that started in January this year.

Oil companies on Monday announced a big rollback in the prices of petroleum products starting midnight Tuesday: P11.45 for a liter of diesel, P5.45 for gasoline, and P8.55 for kerosene, which many households still use for cooking and heating.

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This is the first reduction in local pump prices since December last year when oil companies lowered their prices by P2 to P3 a liter.

While this may be the first double-digit rollback in fuel prices, the cuts still failed to offset the cumulative net increases in prices this year.

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Prior to the rollback, diesel has gone up by P30.65, gasoline by P20.35, and kerosene by P24.90. Last week, oil companies implemented the biggest ever increase in local pump prices of between P7 and P13 a liter.

The latest reduction was due to the decline in global oil prices last week, although increasing tension between Russia and Ukraine could easily reverse the downtrend.

The International Energy Agency also noted that the decline in crude prices might be temporary and warned of a supply shortage if Russian oil would be cut from the rest of the world as part of sanctions being considered by Western countries.

Higher shipping fares

Meanwhile, shipping companies are raising fares in the coming weeks due to higher fuel prices, according to the Maritime Industry Authority (Marina).

“Shipowners in different regions have already informed Marina that they’re increasing fare prices,” Marina Administrator Vice Adm. Robert Empedrad told the Inquirer, adding that the successive fuel hikes have already caused a big impact on the shipping business.

“Fuel is around 40 to 50 percent of their operational cost, and (the increased fuel cost) is a big blow to them,” he added.

According to Empedrad, there is no uniform rate for the adjusted fares because maritime transportation is deregulated, unlike land transportation.

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“It’s different prices for different routes and regions,” he said, adding that shipping companies, both passenger and cargo, were implementing fare increases.

“But it’s mostly passenger ships,” Empedrad said, noting that majority of them were implementing an average 25-percent increase in fares.

He said they have been appealing to cargo shipowners not to increase their rates too much as this might impact the prices of goods and commodities.

With the deregulation, Empedrad admitted that Marina could not do much but just caution shipowners against imposing excessive increases.

“We don’t regulate rate increases, we just evaluate whether it’s excessive or not. We don’t have the authority to say no. We just call them out if we think that the rates are excessive,” he explained.

Empedrad said Marina would ensure that shipping companies properly announce fare increases through newspaper publications to inform passengers at least 15 days prior to implementation.

“In the first two years of the COVID-19 pandemic, we requested the shipowners not to increase their rates, and they heeded our request. It’s only now that they’re increasing their fares,” he said.

Fuel subsidy withdrawals

“We also cannot blame them. They cannot continuously operate if they’re suffering financial losses,” he added.

In Congress, Samar Rep. Edgar Mary Sarmiento, chair of the House committee on transportation, on Monday urged the Land Transportation Franchising and Regulatory Board (LTFRB) and other agencies to “come up with a good system” on the distribution of fuel subsidies to jeepney drivers and operators.

Sarmiento issued the proposal after Pasang Masda president Roberto Martin told lawmakers at a House hearing that some operators were allegedly withdrawing the money that was supposed to be exchanged for fuel from accredited gas stations.

“It means the money is withdrawn and not used as a subsidy,” Martin said.

According to Martin, the LTFRB has already issued show-cause orders to some jeepney operators to explain why their subsidies were withdrawn from the bank.

Sarmiento said the fuel subsidy “should not be cashable.”

He said the Land Bank of the Philippines should have a “safety net” to avoid the fuel subsidy from being credited to the ATM cards of beneficiaries.

“Hopefully, we can come up with a good system,” he said, adding that if the subsidy is converted into cash, then “there should be an automatic suspension of the card.”

—WITH A REPORT FROM NESTOR CORRALES 

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TAGS: fuel prices, International Energy Agency, Russia-Ukraine war
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