FOR the past 45 weeks since the start of the year, gasoline pump prices have risen 28 times; diesel, 24 times; and kerosene, 21 times. With only a few weeks left before 2023 ends, there is no crystal ball to glimpse the succeeding pump price adjustments because of global economic uncertainty.
“We have to manage our expectations that this will continuously go down because there are a lot of external factors involved,” said Department of Energy (DOE) Secretary Raphael Lotilla.
He was referring to the invasion of Ukraine by Russia, production cut by OPEC+, and more recently, the Israel-Hamas war. “Let us hope that the external factors will be resolved so the prices of oil products will normalize,” Lotilla said.
DOE-Oil Management Bureau Director Rino Abad is hopeful that oil prices would be stable in the weeks to come because neither Israel nor Palestine is a major oil supplier. According to him, the risk on the supply will be present once Iran is dragged into the conflict.
Since the downstream oil industry is deregulated, the DOE could not dictate prices nor can it order oil companies to slash prices. Focused actions of the government are now centered on how to help vulnerable sectors cope with high fuel prices.
President Ferdinand R. Marcos Jr. earlier called for a sectoral meeting in order to review the mitigating measures for high fuel prices, and among those who attended the meeting were officials from the DOE, Department of Transportation, the Department of Trade and Industry and the National Economic and Development Authority, the Department of Budget and Management, the Department of the Interior and Local Government the Department of Information and Communications Technology, and the Department of Agriculture.
The President gave instructions to revise the language of the 2024 GAA provision on fuel subsidies for the transport sector in order to shorten the trigger period from three months to one month and simplify the release requirements.
“Whenever the Dubai price per barrel exceeds 80 dollars for three months, that will be the trigger for the provision of subsidies to the transport sector drivers. So, with this simplification or shortening of the period, we will be able to release the subsidies in a shorter period of time,” the energy chief said.
Pantawid Pasada program
SENATOR Sherwin Gatchalian, vice chairperson of the Senate Committee on Energy, said the DOE should immediately coordinate with industry players to ensure a sufficient and steady supply of energy.
According to him, the Land Transportation Regulatory and Franchising Board (LTFRB) should also initiate preparations for an efficient and timely implementation of the Pantawid Pasada program.
“To avoid delay in the disbursement of the subsidy and to ensure the desired impact is realized, the LTFRB and other government agencies concerned should be ready to implement the program efficiently and should have learned the lessons from previous disbursements,” Gatchalian said.
Gatchalian earlier filed Senate Bill No. 384, which seeks to institutionalize the Pantawid Pasada program given the need to set up an energy subsidy program to safeguard the public transport sector against oil price shocks.
Lotilla: Increase ethanol blend
THE energy chief also cited another way to help lower fuel prices. Lotilla said increasing the ethanol blend in gasoline to 20 percent from 10 percent is “targeted for approval by the end of 2023.”
“This is primarily a price mitigation measure because ethanol, especially imported ethanol, is cheaper than the price of gasoline,” he said.
Lotilla said per liter price of gasoline without ethanol is at P56.89, but it can be reduced by P1.28 to P1.50 if blended with ethanol.
Also, hiking the coco methyl ester (CME) coco biodiesel blend from 2 percent to 3 percent is also being discussed.
Chemrez Technologies Inc., the country’s biggest producer of premium CME, commented that pushing for this plan would benefit consumers extensively “with no practical cost to the government.”
“The feedstock is available and the capacities for making CME are ready to support the increase in mandate. We expect many benefits to come with a B3 mandate: mileage improvement; lower pollution; import substitution and value adding of coconut oil,” said Chemrez President Dean Lao Jr., who’s also chairman of the United Coconut Association of the Philippines. “It’s about time the country tapped into this valuable resource,” he added.
ANOTHER measure that the President wanted the government agencies to work on is the continued electrification of the transport sector, particularly mass transport and light cargo vehicles.
“So the President gave emphasis on the need, one, for having the charging stations in place; second, to make sure that the benefits to the transport sector, particularly the drivers, will indeed be there. Because right now, just from a fuel standpoint, the estimated difference between electric vehicles (EV) running per kilometer and those that are internal combustion engines using gas and diesel is quite significant,” Lotilla said.
For those using gasoline, motorists spend P5.30 per kilometer run and those running on diesel spend P4 per km run, but for the light duty electric vehicles, it only ranges from P1.26 to P1.90 per km.
“Of course, these are based on assumptions of the cost of gasoline at P70 per liter and the cost of diesel at P66 per liter,” Lotilla added.
Marcos has also ordered that the manufacturing of EVs be linked up with the local mining sector that will produce the minerals needed for the production of batteries and other components of EVs.
Gatchalian said the DOE should also expedite the implementation of the Electric Vehicle Industry Development Act (Evida) to usher in a widespread use of EVs to ease the country’s dependence on imported oil in the long run.
The oil firms, for their part, assured motorists that they regularly provide pump price discounts, special promos, and other marketing campaigns that could help ease their burden. They also urged the public to reduce unnecessary trips or use mass transportation systems to save on fuel expenses.
Image credits: Siam Pukkato | Dreamstime.com