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P4/l fuel price hike looms

Prolonged war in Ukraine, EU ban on Russian oil push pump cost

DOE Archives/Manila Standard

The Department of Energy (DOE) warned Friday of an impending increase in the price of petroleum products next week amid the ongoing Russian invasion of Ukraine.

Industry sources said pump prices are already trending up by more than P4 per liter. As of Thursday, gasoline was already up by P2.85 per liter, diesel by P4.18 per liter and kerosene by P3.94 per liter.

“This international crisis underscores the urgent need for the Philippines to attain energy independence and security,” Energy Secretary Alfonso Cusi said. “A country like ours cannot remain at the mercy of global supply or price volatilities.”

Meanwhile, the Department of the Interior and Local Government (DILG) urged city and municipal mayors to set up a complaint desk or hotline to address concerns from the beneficiaries of fuel subsidy

Año directed all city and municipal chief executives nationwide to submit a validated list of qualified tricycle drivers to the DILG regional offices on or before April 26 in preparation for another round of fuel subsidy releases under the Pantawid Pasada Program.

The DOE attributed the looming price increase to several factors, including diminishing hopes for a resolution to Russia’s war in Ukraine, and the possible impact of a European Union embargo on Russian oil.

While the EU has not imposed a ban on Russian oil imports, French Finance Minister Bruno Le Maire had recently mentioned that an EU-level embargo on Russian oil was possible.

The warning from OPEC+ on the impossibility of replacing 7 million barrels per day (bpd) of Russian oil and other liquid exports that would be lost in the event of sanctions or voluntary actions also pushed up prices, as did tight supply.

The DOE cited reports that only a few producers could maintain capacity in reserve while raising production. These are Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq.

Iran, under US sanctions, has over 1 million barrels per day that could return to the market. However, Iran would only be able to tap into this capacity if its nuclear talks are successful.

DOE assured the public the country’s oil supply remains sufficient but cautioned against the inevitability of domestic price spikes, which continue to reflect the upward movement in the global market.

In a TV interview, the director of the DOE’s Oil Industry Management Bureau confirmed that prices would shoot up next week.

“We confirm that there is an impending increase in pump prices next week and this is going to be a bit hefty,” Rino Abad said in Filipino.

Earlier, oil companies raised pump prices by as much as P1.70 per liter on Tuesday.

Petron raised gas prices by 45 centavos per liter, diesel by P1.70 a liter, and kerosene by 45 centavos a liter.

Seaoil Philippines, Chevron Philippines, PTT Philippines, Cleanfuel, and PetroGazz also raised pump prices.

On Monday, however, oil prices inched lower amid concerns of slowdown in demand due to lockdowns in China and the ongoing Ukraine crisis, according to Reuters.

On April 12, the oil companies implemented a price rollback for gasoline of P1 per liter, diesel by P0.35 per liter, and kerosene byP3 per liter.

These resulted in the year-to-date adjustments of a net increase of P15 per liter for gasoline, P25.65 per liter for diesel, and P21.10 per liter for kerosene.

“In as much as we want to assist everyone, we must abide by the set parameters that’s why we ask the LGUs and the cooperation of our tricycle drivers in order to speed up the fuel subsidy for them,” Año said in a statement.

Under the Fuel Subsidy Program or Pantawid Pasada Program, which will be funded through General Appropriations Act of 2022, fuel assistance amounting to P6,500 will be directly provided to drivers.

This is not only for affected jeepney drivers but also to qualified drivers of UV express, minibuses, buses, shuttle services, taxis, tricycles, and other full-time ride-hailing (e.g., transport network vehicle service or TNVS and motorcycle taxis), and delivery services nationwide.

Through DILG Memorandum Circular 2022-047, Año said LGUs must produce a validated list of tricycle drivers; tricycle franchisees; addresses; electronic wallet accounts; and number of operating tricycles and other details within their respective jurisdictions.

He said the distribution of fuel subsidy shall be the responsibility of the DOTr-LTFRB and shall be disseminated through the e-wallet account submitted by the beneficiaries.

The details, he said, must be prepared and certified correct by the Head of the Tricycle Franchising Board and the head of the local Tricycle Operators and Drivers Association (TODA).

“It should be certified by the city or municipal mayors and vice mayors. This is to ensure that the list we will forward to the DOTr-LTFRB is correct and legitimate,” said Año.

LGUs must likewise transmit the validated list of beneficiaries to the DILG Regional Office which will serve as a reference document in the distribution of the fuel subsidy to the tricycle drivers; ensure that the fuel subsidy will be utilized for fuel purchases and payments only; and, coordinate with the concerned beneficiary in case of inconsistencies and insufficiencies in details or information.

Año said LCEs are expected to come up with the list to expedite the process of aiding tricycle drivers “whose meager income is further cut by the recent oil price hikes.”

He added that the said list, once validated, shall be the basis of the DOTr-LTFRB in granting the fuel subsidy.

“I urge all city and municipal LCEs to produce a validated list of qualified tricycle drivers who will receive the Pantawid Pasada Program fuel subsidy. This is needed by our fellow tricycle drivers who have been burdened by the recent unprecedented oil price hikes. I hope we will speed up the list to somehow alleviate the burden of our drivers,” Ano said.

 

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