Bongbong, Isko propose ways to blunt oil impact

Two presidential candidates on Thursday proposed measures to blunt the impact of rising oil prices on Filipinos.

Partido Federal ng Pilipinas standard-bearer Ferdinand “Bongbong” Marcos, Jr. called on Congress to pass a law to suspend the excise tax on oil products to mitigate the impact of runaway fuel prices, particularly on the transport sector.

Meanwhile, Aksyon Demokratiko bet Manila City Mayor Isko Moreno Domagoso urged the government to lower the excise tax on electricity and petroleum products not only to unburden the public but also to provide immediate and tangible economic relief for farmers, fishermen, and public utility vehicle drivers and operators.

Marcos was prompted to call for the suspension of the implementation of excise tax on fuel following the surge in the prices of oil in the world market that may result in a spike in gasoline prices by P10 per liter and diesel products by P6 per liter.

Reports, however, noted that kerosene will likely go down by P5 per liter, and Liquified Petroleum Gas (LPG) or cooking gas will be reduced by P3 per kilogram.

“Amending the Oil Deregulation Law with the intent of addressing the issue of runaway oil prices will take some time. This move to suspend the excise tax makes sense and will have an immediate positive impact on our people,” Marcos stressed.

Marcos, who met with leaders of various transport groups recently, lamented the impact rising fuel prices would have on the income of drivers and operators of public utility vehicles.

For his part, Moreno made the call during a town hall meeting in Barangay Banaba, where he met with some 100 farmers and agricultural workers to listen to their problems and suggestions on how to increase their income and productivity.

If elected president, Moreno vowed to halve the excise tax on petroleum products, as this would directly benefit not only poor people but also the middle class who have been at the receiving end of the weekly price increases of crude oil.

The Aksyon Demokratiko standard-bearer said he is also planning another 50-percent tax break on electricity, as this will be beneficial not only to consumers but also to owners of business enterprises since this would mean additional savings or translated as income for all.

Moreno explained the positive impact of the tax cut on fuel will be immediately felt by operators and drivers of PUVs, who would then forego their demand for fare adjustment, which would be detrimental to the commuting public, mostly the poor and middle class.

“We need to do something about this issue urgently because one sector that will be gravely affected has been suffering for the longest time in this pandemic. Transport workers and operators who depend on their daily operations for their livelihood are already in dire straits,” Marcos added.

Transport groups who met with Marcos recently were the Pangkalahatang Sanggunian Manila and Suburbs Drivers Association (Pasang Masda); Federation of Jeepney Operators and Drivers Association of the Philippines (FEJODAP); Philippine Confederation of Drivers and Operators – Alliance of Concerned Transport Organization (PCDO-ACTO); Liga ng Transportasyon at Operators sa Pilipinas (LTOP); Alliance of Transport Operators and Drivers Association of the Philippines (ALTODAP); and Tiger in Asia.

Marcos also called on the Department of Energy to study the restoration of the defunct Oil Price Stabilization Fund (OPSF) to cushion the economy from the inflationary effects of prolonged high oil prices.

“I implore the DoE to make a careful study on the possibility of bringing back the OPSF,” Marcos said.

Signed into law in 1998, Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 aimed to liberalize and deregulate the oil industry and ensure a competitive market.

However, after the full deregulation phase, prices of petroleum products continued their upward trend since the country remained a net importer of the product, and changes in global prices still dictate local pump prices.

“While we acknowledge that the price of oil is determined by free-market forces, the government should have mechanisms prepared to intervene when the need arises. The OPSF will give us that ability and a serious consideration for its return should be studied,” Marcos added.

The OPSF was set up in 1984 by former President Ferdinand Marcos to protect consumers from fluctuations in the prices of oil in the global market.

Under the program, oil companies contributed a portion of their sales to the OPSF to serve as a buffer fund. It was later abandoned during the time of President Fidel Ramos.

“The pandemic has changed the energy landscape. Just like any country reeling from it, we should learn to adapt to this new environment. I, for one, have always been a proponent of renewable energy and I believe that it will play a crucial role not only in our recovery but in the country’s future as well,” Marcos added.

The DoE also explained the surge in oil prices was mainly due to a sudden increase in global demand as more countries started opening their economies. The DoE added that slow production and stockpiling for winter of some countries also jacked up demand.

Local oil prices have risen for eight straight weeks. Pump prices were raised on Monday with gasoline increasing by P1.8 per liter, diesel and kerosene prices by P1.5 per liter, and P1.3 per liter respectively.

“To cushion the socio-economic impact of the pandemic, a 50-percent reduction in fuel excise tax can lower the power generation cost and another 50-percent cut on taxes on electricity would mean savings for the majority of our people, many of whom are jobless now due to the Covid 19 pandemic,” Moreno stressed.

“If we implement a tax cut on gasoline and petroleum products, we can expect more jeepneys plying their routes and they will earn more since there will be more commuters who are going to their places of work. When drivers earn more, they will have more buying power and this will further perk up the economy,” he said.

Similarly, Moreno said a 50-percent tax cut on electricity would mean more food on the table and more money to spend on basic needs, including medicines.

“We cannot bring down the cost of power generation but the end-users or the consumers, can be made to pay lower electricity bills. How? Bawasan natin ang buwis sa kuryente ng 50 porsyento. Mababawasan ang kita ng gobyerno pero ang tao ang panalo dahil sa malaking pera na kanilang matitipid,” said Moreno.

The Manila mayor said it is better that the national government do the sacrifice instead of letting the people suffer the brunt of the spiraling prices of fuel and petroleum products which has been happening for eight consecutive weeks since August.

“There is such a thing as delayed gratification principle which means that while the government bites the bullet by implementing a 50 percent tax cut on electricity and fuel, the end-result is still favorable to the government.”

“Although the government would suffer from lower tax collection, the buying power of the people increased, and it returned to our economy which became even stronger. That is a positive chain reaction,” Moreno emphasized.

Moreno, who also serves as president of Aksyon Demokratiko, noted that the never-ending increase in the prices of gasoline, diesel, and kerosene has triggered demands from transport groups, drivers, and operators of PUVs for a transport fare hike.

Operators and drivers of PUVs, commuters, consumers, and marginal fishermen are expected to bear the brunt of the string of oil price increases that started in August as energy firms were forced to shut down US production.

“The income of farmers and fishermen will definitely be affected by the fuel price hikes. Farmers use crude oil in their farm tractors, kuliglig and motors that are used for irrigation. Even their fertilizers and pesticides are by-products of petroleum. Fishermen will also have to reduce their fishing trip because of high fuel prices,” said Moreno.

“With the winter months coming, demand for oil is expected to increase until February, adding to the unstable world market. This is only a moratorium on taxes, called for by the situation. Government should adjust to the public’s dire hardships,” the Aksyon Demokratiko standard-bearer said.

Topics: Partido Federal ng Pilipinas , Ferdinand “Bongbong” Marcos Jr. , Aksyon Demokratiko , Mayor Isko Moreno Domagoso , excise tax , oil products
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