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Speaker to oil players: Do your part to ease burden of rising prices

Speaker Ferdinand Martin G. Romualdez on Monday appealed to key players in the oil industry to share the burden of rising prices of oil to ease its impact on the daily lives of ordinary Filipinos.

Meanwhile, pump prices went up for the 11th consecutive week, as the price of diesel rose P2.50 a liter while kerosene rose by P2 a liter. Gasoline prices went up as well, by P2 a liter, effective 6 a.m. Tuesday.

Phoenix Petroleum, Seaoil Philippines, PTT Philippines, Chevron Philippines, and Cleanoil issued separate announcements of the price increases.

Romualdez and other lawmakers met with representatives from the major oil companies and the Department of Energy (DOE) to find ways to shield consumers from the worst effects of the rapidly rising fuel prices.

OIL PRICE DISCUSSION. Speaker Ferdinand Martin G. Romualdez, Albay Rep. Joey Sarte Salceda, and Camiguin Rep. Jurdin Jesus Romualdo (from left) discuss with oil industry players possible moves that could take the pressure off Filipinos amid spiraling fuel prices on Monday. Ver Noveno

“If you are part of the solution, Congress will be very appreciative and supportive of you. But if you are part of the problem, we might have to undertake measures that would be unpalatable to you,” said Romualdez, leader of the 311-member House of Representative.

“I hope we can work together to help our people,” said Romualdez, as he suggested that oil firms may be able to find ways to cut their profit margins to reduce fuel prices.

In the Senate, Senator Sherwin Gatchalian said the government’s Pantawid Pasada Program should benefit not just the poorest of the poor but also the middle class who are hit by skyrocketing prices of fuel.

In an interview over TeleRadyo Serbisyo, Gatchalian said the fuel subsidy doesn’t help the middle class and said this was a defect in the Pantawid Pasada program.

The chairperson of the Senate oversight committee on biofuels also cited the congested and inefficient public transport system.

Oil industry executives assured Romualdez they would relay the Speaker’s appeal to their principals, who can decide on any commitment that they can make in the next consultative meeting with the House.

Romualdez assured them that the House is open to hearing other alternatives to address the relentless rise in oil prices, including possible adjustments to fuel taxation policies, that has been causing considerable strain on the budgets of Filipino households.

“We want to make sure that we can bring to the Filipino people a very safe, secure supply of oil products at very reasonable and realistic prices,” Romualdez said.

Among the possible courses of action discussed during the meeting is the proposal of Rep. Rodante Marcoleta to revisit the Oil Deregulation Law, as he noted there is no transparency in the pricing scheme of oil industry players.

He noted that oil players sought and obtained a temporary restraining order against the DOE circular requiring oil firms to submit detailed computations with corresponding explanation and supporting documents on the reasons for any movement of their oil prices.

Rep. Estella Luz Quimbo, vice chair of the House Appropriations Committee, also noted that oil companies would usually submit to the DOE practically the same price adjustments “up to the last decimal point.”

“There is no reason why you would have the same weekly price adjustments,” she said.

Quimbo proposed that the DOE discard the practice of submitting price adjustment schemes weekly and instead just allow oil firms to make such submissions when it becomes necessary for each of them to increase prices or implement a rollback.

Joining the Speaker in Monday’s consultation were Senior Deputy Speaker and Pampanga Rep. Aurelio Dong Gonzales, House appropriations chair and Ako Bicol Rep. Elizaldy Co, House ways and means committee chair and Albay Rep. Joey Sarte Salceda, and members of the House committee on energy.

The meeting also included DOE officials, led by Undersecretary Sharon Garin, and representatives from Petron Corp., Pilipinas Shell Petroleum Corp., Independent Philippine Petroleum Companies Association, as well as officials from Chevron Philippines Inc., Philippine Institute of Petroleum, Flying V, and Total Philippines Corp.

The director for the DOE’s Oil Industry Management Bureau, Rodela Romero, also warned of possible oil price hikes until the end of the year.

She attributed the surge to the “tighter supply outlook due to Saudi Arabia and Russia’s voluntary production cuts, Libya’s supply disruption due to a hurricane and further US crude inventory withdrawals.”

“There are forecasts that prices will go up until December as world oil demand is higher than world oil supply,” she said, adding that expectations of higher interest rates, the prospect of additional supply and a stronger dollar might offset the increases.

Diesel prices have gone up by P14.80 per liter while kerosene increased by P13.95 per liter for the past 10 weeks.

On the other hand, gasoline prices went up by P9.85 per liter for the past nine weeks.

On Sept. 12, the oil companies imposed an increase of P0.20 per liter for gasoline, P0.40 per liter for diesel and P0.20 per liter for kerosene.

These price adjustments resulted in a year-to-date net increase of P15.50 per liter for gasoline, P11.10 per liter diesel and P7.94 per liter for kerosene, the DOE said.

The Philippine Institute for Development Studies, the government defines the middle class as those earning incomes between two to 12 times the poverty line, or around ₱24,000 and ₱145,000 in family income.

Earlier, the Department of Budget and Management approved the release of P3 billion in fuel subsidies for 1.36 million drivers nationwide.

The subsidies range from P10,000 for modernized public utility jeepneys to P1,000 for tricycle drivers.

Furthermore, Gatchalian said the government should carefully study a proposal to suspend fuel excise taxes on oil products as this might have “too drastic” an effect on public revenues.

At present, excise tax rates for major petroleum products are P10 per liter for gasoline, P6 per liter for diesel, P5 per liter for kerosene, and P3 per liter for LPG.

If the excise tax is removed, he said even the rich and the middle class would gain from it.

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