The successive increases in fuel prices have jacked up manufacturing costs, which may be passed on to consumers, Trade Secretary Ramon Lopez said Wednesday.
In an interview with Dobol B TV, Lopez estimated that the higher fuel prices had a 3.5 percent impact on the cost of production.
Manufacturers, however, have not yet petitioned for a rise in the suggested retail prices of their grocery items, he said.
Since the start of the year, pump prices of fuel products have gone up P8.75 per liter for gasoline, P10.85 per liter for diesel, and P9.55 per liter for kerosene.
Meanwhile, a militant lawmaker on Wednesday urged President Duterte to call for a special session of Congress to approve a measure suspending the excise tax on oil for at least six months.
Deputy Minority Leader and Rep. Carlos Zarate of Bayan Muna issued the statement, saying the national government should “take preemptive measures that will cushion the impact on the prices of commodities, including oil, due to the brewing tensions in Eastern Europe.”
“Holding a special session is still feasible before the campaign period of local candidates starts. We can also have a blended session to push this measure,” Zarate said.
He said suspending the excise tax on oil products would immediately lower the price of fuel products and even the price of basic commodities.
Zarate warned, if the excise tax is not suspended, this may result in “price shocks just like what happened in 2018 when the Tax Reform for Acceleration and Inclusion (TRAIN) law was implemented.”
“Duterte and his economic managers cannot escape the blame now because their TRAIN law is punishing even more the people during this pandemic-aggravated crisis,” Zarate said.
The measure proposing recommending the reduction or suspension of the excise tax on fuel products amid their increasing prices is awaiting plenary approval in Congress.
Senator Sherwin Gatchalian, meanwhile, said he plans to file a bill to institutionalize the Pantawid Pasada fuel subsidy program for public transport, to address the adverse effects of oil price hikes.
He said institutionalizing the Pantawid Pasada Program was more economically viable than suspending excise taxes on fuel.
The Department of Finance pushed back on the call to suspend the excise tax, saying this would be inequitable and would hurt the country’s economic recovery in the long run.
Gatchalian said the suspension of fuel excise taxes would forego P271.238 billion in revenues while the Pantawid Pasada program would cost the government P1.936 billion, covering all public utility vehicles (PUVs).
Gatchalian said that the almost 2 billion peso-fund is already covered by the 2022 General Appropriations Act (GAA) as there is a P2.5 billion allocation for the continuing implementation of the program.
“This is a tried and tested program already,” Gatchalian said.
Gatchalian suggested the electronic transmission of the fuel subsidy to ensure its timely remittance to the targeted beneficiaries.
Data from the Department of Energy (DOE) showed that the price hikes since December 28 last year reflected an increase of P6.80 or 10.85 percent per liter for gasoline, P10.20 or 21.70 percent for diesel, and P8.23 or 15.86 percent for kerosene.
A total of 377,443 beneficiaries will receive their fuel subsidy amounting to P6,500 once the program resumes in April.
Meanwhile, Senator Imee Marcos urged the government to find a longer-term solution to rising crude oil prices that will render fuel subsidies for PUV drivers, farmers, and fisherfolk inadequate.
Marcos, who chairs the Senate committee on economic affairs, said she is ready to give legislative support for the government’s long-term plan to increase the country’s oil reserves.
However, she expressed displeasure at the slow pace of bidding out a study to set up the country’s Strategic Petroleum Reserve.
“We already missed the opportunity in 2020 to buy oil at low prices when pandemic restrictions tightened and slowed down fuel demand,” she said. “This emphasizes the need for forward planning and swift action.”
