DOE warns of heavy impact of OPEC production cuts by next month
Consumers can expect pump prices to continue rising as a result of the decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production by 2 million barrels per day starting next month.
“Oil prices will continue to go up. The only way that will be reversed is if OPEC+ cannot fulfill its announcement to cut production,” Department of Energy director for the oil industry management bureau Rino Abad said.
OPEC+ decided to cut production on prospects of slower global economic growth.
Sources said diesel prices are estimated to go up P5 per liter as of Monday.
This follows the oil price hike imposed by oil companies on Tuesday of P6.85 per liter for diesel, P3.50 per liter for kerosene, and P1.20 per liter for gasoline.
The increase ended five consecutive weeks of rollbacks.
Malacanang said it expects to announce specific plans to address the soaring prices of fuel.
This developed after President Ferdinand Marcos Jr., during the 11th Cabinet meeting, looked into the persistent calls for the suspension of the excise tax on petroleum products.
In a Palace press briefing, Press Secretary officer-in-charge Cheloy Garafil said Marcos and his Cabinet are eyeing several options to mitigate the impact of fuel price hikes on the public transport sector.
Garafil, however, did not offer any specifics about the government’s plans.
Senator Sherwin Gatchalian asked the Land Transportation Regulatory and Franchising Board and other concerned agencies to ensure an efficient and timely fuel subsidy program for affected sectors should price hikes continue.
Gatchalian said there should be a law to help drivers and public utility vehicle operators mitigate the impact of high oil prices.
The senator reiterated the need to institutionalize the Pantawid Pasada Program, the reason he had earlier filed Senate Bill No. 384.
The proposed measure provides that the subsidy shall be granted to qualified beneficiaries when the average price of Dubai crude for three consecutive months is equal to or greater than $80 per barrel, which is the case today.
Gatchalian said the proposed legislation requires the use of digital payment systems in the subsidy distribution and imposes penalties against erring government officials for failure to ensure the timely release of the subsidy to all qualified beneficiaries.
“The concerned government agencies should be ready to intervene with an efficient implementation of the Pantawid-Pasada program whenever there are series of oil price hikes. We should have learned the lessons from the previous disbursement,” Gatchalian said.
A new fare hike took effect last Oct. 3, but PUV drivers and operators could not collect the fare increase because they have yet to secure their copy of the new fare matrix.
Transport groups said the new round of fuel price hikes will wipe out the benefits of the recent fare increase.
The president of Pasang Masda, Obet Martin, told a TV interview that they had a rollback of almost P4 for three consecutive weeks yet on the fourth week, they were surprised by a P6 per liter hike.
He said this was dismal as they were just starting to recover.
Several transport groups on Sunday reiterated its plea for the government to suspend the collection of excise tax on petroleum products for three to four months.
The Federation of Jeepney Operators and Drivers Association of the Philippines president Ricardo Rebaño said the suspension is a “win-win solution,” noting that it is a better solution than imposing another round of fare hike that will merely burden the commuters.
Following the signing of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN Law), the government is currently imposing an excise tax rate of P10 per liter for gasoline and P6 per liter for diesel.
Last week, Occidental Mindoro Rep. Leody Tarriela filed a bill aimed at cushioning the impact of high gasoline and diesel prices by applying progressive excise taxation on fuel.
Under Tarriela’s House Bill 3628, the excise tax shall gradually decrease as fuel prices increase.