Phoenix Petroleum Philippines on Friday announced a rollback of P1.40 per liter for gasoline and P1 per liter for diesel, advancing the price adjustments carried out every Tuesday by the oil companies.
Other oil companies are expected to follow suit in line with a request from Energy Secretary Alfonso Cusi to implement a rollback early due to the softening of world oil prices to help consumers reeling from rising prices.
The rollback, which took effect at 6 pm yesterday, ended three weeks of consecutive oil price hikes due to volatilities in the world market.
The oil firms, however, raised the price of cooking gas or liquefied petroleum gas by P3.36 to P3.40 per kilo to reflect the higher contract price of LPG in the world market.
Petron also increased its LPG prices by P3.40 (VAT inclusive) and auto LPG by P1.90 per liter effective 12:01 am June 1.
“These reflect international contract prices of LPG for the month of June,” Petron said.
Cusi, meanwhile, said state-owned PNOC Exploration Corp. has started negotiations to import diesel from Russia and other oil companies.
“We are vulnerable in terms of security of supply considering it’s all in the hands of the private sector so when President [Duterte] made a state visit in the Middle East and other countries one of the things we did is to have an MOU [memorandum of understanding],” Cusi said, noting this would assure the country of a supply of oil in case of disruptions.
He said PNOC EC will conduct the fuel importation starting this month on a government-to-government basis.
The energy chief said PNOC EC has also started looking for storage areas, possibly in Subic, Quezon or the Phividec Industrial Authority in Misamis Oriental.
“Our concern is security of supply and price,” Cusi said.
He said the first shipment importation would be about 50,000 metric tons with four shipments targeted.
“We have to balance the receiving facility with our ability to bring in and to be able to sell it,” Cusi said.
The initial 50,000 metric tons is only a target, he added, and the price would be a product of negotiation between the parties.
“We are doing everything to alleviate the problem,” Cusi said.
He said the planned importation will secure a supply of oil and allow government “to benchmark what is really the cost of these products.”
Cusi earlier said the oil firms have an inventory of around 15 days for finished products and 30 days for crude products.
“We want to have a higher inventory so we have a safety measure. So we asked PNOC EC to import…and we can sell that to a third party in the industry,” the energy chief said.
Cusi said they will ask buyers of the imported fuel from PNOC EC to give special discounts similar to the discounts to public utilities offered by the oil firms.
“We will continue with the discounts and we will ask the oil firms to increase the discounts,” he said.
Cusi is also hoping that the high oil prices globally will continue to level off.
“There are other factors that can also affect price…it’s the law of supply and demand…If the producing countries will be producing more oil and there will be excess supply, so that will suppress surge in price. Hopefully, all the other problems in these increases in price of oil will also be resolved,” he said.
Senator Grace Poe on Friday asked where the fuel vouchers promised to jeepney drivers were, noting that the government has yet to roll out a flurry of social mitigating measures announced to shield the poor from rising commodity prices.
She urged the government to release the guidelines to implement the fuel vouchers, an additional 10-percent fare discount, and other subsidies to minimum-wage earners, the unemployed, and the poorest 50 percent of the population spelled out under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
“First, the fuel vouchers should be distributed. Second, let us be quick in giving out the money here in the unconditional cash transfer because there is a certain percentage who failed to receive this,” said Poe, chairman of the Senate committee on public services.
Poe is also the author of Senate Resolution No. 736 that set in motion the legislative inquiry held at the Albay Provincial Capitol about the effects of TRAIN Law on prices of fuel, transportation, electricity, and water.
She urged the concerned government agencies to immediately implement the social measures, which should be effected retroactively.
“They should start because no guidelines have yet been released,” Poe said in Filipino.
Transport and consumer groups and student leaders present during the hearing narrated that the Transport Department has not yet discussed with them the possible subsidies they could get under the TRAIN Law.
A representative from the Transport Department said they have a self-imposed deadline of end-June to publish the rules for Pantawid Pasada Program. About P977 million is appropriated for the program this year, which would be distributed to some 179,000 jeepney franchise holders, senators were told.
Under Section 82 of the TRAIN Law, jeepney franchise holders are entitled to fuel vouchers; minimum-wage earners and the poorest 50 percent of the population are qualified for fare discounts, discounted National Food Authority rice and free skills training, while a total of 10 million low-income households will each receive P200 per month this year and P300 per month in 2019 and 2020.
However, only 4.4 million families have received the targeted cash transfers.
Five months into the implementation of the TRAIN Law, Filipinos are feeling the pinch of relentless price increases, which critics said have been fanned by the revenue-generating measure that imposed or raised taxes on fuel, vehicles and sweetened beverages.
“Many people feel the effects of higher prices, not just brought about by TRAIN but the world market, the prices of oil, but there are safety nets that we should be able to implement immediately and it’s in the hands now of the government to make sure that those subsidies are distributed on time to our countrymen so that the poorest who are affected by this will be given a reprieve,” Poe said.
During last week’s hearing in Iloilo, Poe called for the immediate suspension of fuel excise taxes amid mounting complaints that the law aggravated price spikes on the back of rising global fuel costs and weakening peso.
But the Department of Finance has opposed calls for the suspension of specific portions or the entirety of the TRAIN Law, saying it was necessary to shore up revenues to finance various infrastructure programs and projects.
The TRAIN Law, which overhauled the income tax regime and increased the ceiling for tax-exempt salaries, imposed a new P3 tax for every liter of kerosene, P2.50 for every liter of diesel and bunker fuel, and P1 for every kilogram of liquefied petroleum gas.
Poe’s call comes as the price of cooking gas or liquefied petroleum gas increased by as much as P3.40 per kilogram and as fuel prices have increased for three consecutive weeks. She said that fare discount is also necessary as school opening looms.
Albay Rep. Joey Salceda, one of the proponents of the TRAIN Law in the House, acknowledged that while the TRAIN Law has an inflationary effect, the tax reform law only contributed 0.4 percent to the April inflation.
The former Albay governor also said that about P28 billion is appropriated this year for various measures to mitigate the impacts of the TRAIN Law.
Two leftist lawmakers on Friday, meanwhile, assailed Budget Secretary Benjamin Diokno for saying Filipinos should “be less of a crybaby” about the rising price of fuel.
Gabriela Party-list Reps. Emmi de Jesus and Arlene Brosas said Diokno should be less of a price hike poster boy and stop playing down the impact of the price hikes on the poor.
“Secretary Diokno is once again blabbering inside his bubble telling people not to be crybabies when oil prices have already increased 17 times since the start of the year while wages have remained stagnant,” De Jesus said.
De Jesus also said it is also wrong to compare the $135 per barrel global oil price during the Arroyo administration and the current $72-77 per barrel global market prices since all other things are not constant.
“The peso remains at its weakest in 12 years, plunging to P52.7 last week. Erosion of wages has been in an alarming state under the Duterte administration,” De Jesus said.
Brosas also blamed the TRAIN Law as a contributory factor to skyrocketing prices of fuel and other basic commodities.
“The impact of the TRAIN law, which levies additional taxes on oil products on top of expanded value-added tax, certainly has a permanent effect on local prices. That is why it is very wrong to compare the situation then and now,” Brosas said.
Diesel prices have already increased by P10.45 and gasoline prices by P10.32 in the first five months of the year, including the effects of TRAIN. She said these huge price hikes certainly have a pass-on effect on the costs of production and transport of almost all goods and services.
The women’s group said the Duterte administration should stop reasoning out that TRAIN has a minimal impact on prices and instead move for its repeal, if it really wants to provide instant relief to consumers.
Also on Friday, the main author of a bill mandating a P750 minimum wage defended his proposal, saying it will not lead to runaway inflation.
Bayan Muna Rep. Carlos Isagani Zarate said “raising wages nationwide is good for the working people and for the economy as whole.”
“It is blatantly anti-worker and unjust to deny wage hikes because of the allegations that it will jack up prices,” Zarate said.
“On the contrary prices have already been increasing for years but wages are stuck at some P500 in Metro Manila and worse P300 plus in many provinces even if the cost of living already skyrocketed to P1,200 for a family of six,” Zarate added.
Zarate said demands for P750 national minimum wages are only meant to recover “the eroded purchasing power of workers and employees due to rising price caused by monopoly overpricing, tax reform acceleration and inclusion or TRAIN Law and other factors.”
“It is erroneous to insist that a nationwide wage hike is inflationary. Increases in wages will lead to decrease in profits of capitalists but won’t affect the basis of price,” Zarate said.
Zarate said “to say that nationwide wage hikes may jack up prices is one-sided and half-lie.”
“Nationwide wage hikes may temporarily affect the prices of some commodities because of the increased purchasing power of workers and employees but this will be very temporary as profit-motivated capitalists will move to increase their production to meet the increased demand. Sooner than later, supply will be at par or may even exceed demand,” he said.
Moreover, nationwide wage hikes will spur more production and create jobs as capitalists will be prodded to produce more because of better purchasing power of the workers.
“Wage hikes are really good for the workers and the economy,” Zarate said.