Roque says admin spooked by surging oil prices
President Duterte, concerned about the continued rise in world crude prices, has asked his Cabinet to come up with measures to cushion the impact of rising prices in the country, presidential spokesperson Harry Roque said on Monday.
Roque said the “crisis” sparked by high oil prices was temporary.
He and finance officials assured the public that the government was dealing with the resulting rise in inflation rate.
On Sunday, Sen. Panfilo Lacson warned that people groaning under the weight of the high cost of living could move to oust the government. “When the stomach protests, prepare for revolution,” he said.
New oil price hike
Malacañang’s search for measures to soften the impact of rising crude prices on the economy came as pump prices of oil products in the country were expected to rise for the third consecutive week on Tuesday.
Most local retailers announced that the price of gasoline would rise by 65 centavos per liter, while that of diesel by 35 centavos per liter, and kerosene by 45 centavos per liter.
The latest round of price adjustments brought the cumulative increase in gasoline prices to P10.32 per liter so far this year. The cumulative increase for diesel was P10.36 and for kerosene, P10.66 per liter.
The imposition of an excise on fuel under the Tax Reform for Acceleration and Inclusion (TRAIN) Act has further jacked up prices of oil products in the country.
“This crisis is not a permanent one. It is really a crisis because the oil prices increased over 200 percent and we really did not expect it because crude price had been stable,” Roque said in a press briefing.
He said the President wanted to assure the public that his administration was looking at all the options and ways to resolve the situation.
Mr. Duterte has asked Cabinet members to come up with “alleviation measures” at the next Cabinet meeting on June 11, Roque said.
Roque said the priority of the government now was to import diesel from Russia, which he noted was not a member of the Organization of the Petroleum Exporting Countries.
Assistant Finance Secretary Paola Alvarez, who attended the briefing, said the Department of Finance expected that world crude prices would not reach $80 a barrel as being feared if production was increased.
The inflation rate in the country was increasing moderately, she said, describing it as “normal for a growing economy.”
She said the TRAIN law, which took effect in January, did not cause inflation to spike as the law “only gave an impact of 0.4 percentage point to the overall inflation rate.”
Alvarez said the law provided that once international oil prices (Dubai crude) reached $80 a barrel, the government could suspend the implementation of the next tranche of increase in the excise on oil in the succeeding years.
That means the government can suspend the implementation of the increased excise on oil in January 2019.
Alvarez said the government could not suspend the excise because the law was specific that it could be suspended only in the next stage of increases.
She also said that the government could not suspend its collection because it had set aside funding for items like free tuition in state universities and colleges (SUCs).
The assistant finance secretary said that among the measures to mitigate the impact of high oil prices was giving unconditional cash transfers to the poorest.
Alvarez also said the government was releasing P33 billion monthly as “disposable income” for the people.
These include P2.5 billion a month in unconditional cash transfers; P12 billion in personal income tax reductions; P15 billion in wages in connection with the construction of government infrastructure and P3.5 billion in free tuition in SUCs.
Roque said only Congress had the power to suspend the collection of the excise on fuel. He also said he saw a provision in the value-added tax (VAT) law that allowed its possible suspension.
Under the TRAIN law, the 12-percent VAT is imposed on the excise on fuel, according to Liza Maza, head of the National Anti-Poverty Commission. Maza is calling for the scrapping of this provision.
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