June 20, 2024


The operative is “yet” or “not at this point”, but the entire Filipino nation, which has just started recovering from the crippling impacts of the Covid-19 pandemic, should be dreading the time when the government decides to declare a state of economic emergency due to the skyrocketing fuel prices and the domino effect it will create on the economic status of every citizen.
The recommendation to declare the state of emergency came up due to the oil price spikes that started in 2021, but which are breaking record highs in the past week as global oil prices continue to increase and since war broke between Russia and Ukraine, the latter being an oil producing country.
According to reports, gasoline and diesel prices have gone up by 31.3 percent and 44.1 percent, respectively, while kerosene increased by 34.2 percent since last year, despite the explanation that the Russia-Ukraine conflict should not have a direct impact to the supply coming to the country since we import fuel from Middle East countries.
Oil companies implemented the highest oil price hike so far last March 8 and there seems be no let-up that can be seen in the near future.
The Department of Energy said declaring a state of economic emergency is not needed at this point and the government is doing everything it can to address the problem. It recently allotted fuel subsidies for the transport and agriculture sectors, which will be given in two tranches this month and April.
The agency hopes the problem will not last long.
The same is our hope as well, but last we checked, prices of many commodities have never rolled back but in fact are a far cry from before, with or without the effects of an oil crisis.
As expected, the public transport sector is also asking for a fare hike, one it claims that should include the fare adjustments that have not been granted yet from their previous petitions.
The National Economic Development Authority however is not keen about it, saying a fare increase may affect the inflation rate and lead to wage hike petitions.
But it may not also be long the labor sector would ask for an adjustment in the minimum wage to cushion the impacts of the continuously increasing cost of living.
And we still have the massive effects of a pandemic, though Covid cases are on its decreasing trend, to grapple with and trying to overcome.
The question is how the government will decide in the event of a longer oil crisis. What is its gauge of a worst-case economic scenario? Can it afford to give subsidy vouchers every time COLA hits the ceiling and our means of living remains at the bottom?
While grateful for the government subsidy, a transport sector operating in the Cordillera and Region 1 said a long-term solution to the oil crisis will be more welcome, such as government revisiting the Oil Deregulation Law so that oil prices will not be hiked unreasonably and not totally removing fuel taxes but cut it instead so that oil prices do not have be so high.
It is bad enough that the country cannot do anything about the dictates of the world market and when crises such as the Russian-Ukraine war occur. While we acknowledge the intent of oil price deregulation to encourage competition among oil players and keep its prices, it does not seem to be serving its purpose.
With the recent developments, we are not surprised about the renewed call for the review of Republic Act 8479 or the 1998 Downstream Oil Industry Deregulation Act, led by Malacañang no less.
Aside from this call, we note the administration’s nod on the recommendation to “accelerate renewable energy adoption, maximize use of renewables, support investments in modern storage facilities for oil and grains, empower the private sector to help in stockpiling, building of strategic petroleum reserve infrastructure, and advocate for energy conservation and efficiency.”
But why are some national legislators cool about the review? They say a policy shift might tie the hands of the incoming administration in light of the May 9 elections.
But Juan asks, are we more concerned about the upcoming transition than mitigating the immediate impacts of the worsening oil crisis to the majority of Filipinos?