iTalk by Ismael Amigo
iTalk

Runaway oil price hikes

Oct 28, 2021, 12:18 AM
Ismael Amigo

Ismael Amigo

Columnist

I am both excited and saddened with the way things are happening now and in the days ahead.

Am excited for the coming week as my daughter Niana is soon to have her very first major acquisition all to her sariling sikap, a brand new car coming out on Monday, the 25th of October.

At the same time, am saddened, because, although, her car is advertised to be fuel-efficient as it can get at 21km to a liter, unit prices of fossil fuel are on a roll.

It’s spiking up for the 8th straight week.

The Department of Energy (DoE) has already appealed to Congress to suspend the excise tax to negate the impact of runaway oil prices particularly on the transport sector.

If that will be made by the to issue an Executive Order (E.O.) suspending the excise tax, it will cushion the impact of the surge in oil prices as the EO may slash gasoline prices by at least P10 per liter and diesel products by at least P6 to a liter.

On the other hand, kerosene will also likely go down by P5 per liter, and LPG, common fuel used by households for cooking, could be reduced by P3/K.

As it is, transport sector workers and operators who depend on their daily operations for their livelihood are already feeling the pinch of the runaway oil prices.

In particular, the transport groups who are raising a howl over the new price hikes.

The DOE is also being urged 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.

The OPSF was signed into law in 1998 (R.A. 8479) otherwise known as 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.

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 on abandoned during the time of President Fidel Ramos.

Local oil prices have risen for the eighth straight week now.

Pump prices were raised last Monday with gasoline increasing by P1.8 per liter, diesel and kerosene prices by P1.5 per liter, and P1.3 per liter respectively.

So there. These are the scenario my daughter needs to endure with her brand new car.


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