Drivers and farmers see fuel price pinch “worse than a pandemic”


Manila, Philippines – Leaders of farmer and transport groups on Friday sounded the alarm on a threat “worse than the pandemic” – steadily rising oil prices and the lack of government guarantees for marginalized sectors.

At a press conference at the University of the Philippines (UP) Diliman, Anakpawis National President Ariel Casilao warned that the surge in oil prices over the past eight weeks will cause commodity prices to rise. basic, food and services.

Casilao, a former lawmaker, urged the government to push for a price control law or a resolution to lower oil prices, and said the excise tax imposed by the TRAIN law (tax reform for acceleration and inclusion) should be repealed.

He said Energy Secretary Alfonso Cusi overlooked the upward trend in oil prices, even when they climbed 32% last April.

Elsewhere, public policy think tank Infrawatch PH has called on President Rodrigo Duterte to suspend taxes on petroleum products until global oil prices have stabilized.

“In many cases, the president has never shied away from taking executive action in the public interest,” said Terry Ridon, head of Infrawatch PH. “There is nothing that can prevent [him] to take executive action to deal with rapidly rising oil prices during this period of price volatility. “

Among other things, Duterte can order the suspension of value-added and excise duties on petroleum products to control current price volatility, Ridon said.

domino effect

At the UP Diliman forum, Rafael Mariano, former secretary for land reform, stressed that rising oil prices had a “domino effect” on farmers who would now have to face higher production costs.

“Many of our farmers use private irrigation, water pumps and oil-based fertilizers. With increased production costs, low values ​​for their crops and increased transportation costs, their yield would not be profitable for them, ”said Mariano, President Emeritus of Kilusang Magbubukid ng Pilipinas.

The transportation sector is also severely affected, with thousands of drivers and operators losing their livelihoods from March 2020 due to the pandemic, Piston National President Mody Floranda said.

“By law, if world crude oil prices exceed $ 80 per barrel, price controls must be in place. This week, prices hit $ 95 a barrel. It is only right to impose price controls on petroleum products now, otherwise prices will continue to skyrocket every week, ”said Floranda.

UP Transport Group spokesperson Nolan Grulla said jeepney drivers are already grappling with the government’s modernization program and the 50% capacity limit for public utility vehicles (VPUs).

“Because we follow government protocols – or we’ll be arrested – we only earn an average of P 200 per day. A trip would cost us more than P50 in fuel, but we only gain P84, ”said Grulla.

With the relentless increases in oil prices, he said, it had become more difficult for them to give a loan of 1.6 million pesos to 2.4 million pesos to modernize their jeepneys, which would force them to pay some 2,000 pesos per day.

On Monday, the Department of Transportation and the Land Transportation Franchising and Regulatory Board pledged to seek financial assistance from displaced PUV drivers to prevent direct fare increases.

The public can’t wait

Deputy Transport Secretary Mark Pastor said the two agencies were coordinating with the Energy Ministry for a “uniform discount” for PUVs, especially jeepneys, at all gas stations across the country, as well as providing fuel subsidies to drivers.

But farmers and transport groups have demanded a more permanent solution from lawmakers, such as legislation to regulate the oil industry.

But Ridon said the public “cannot wait for new legislation to solve problems requiring urgent solutions.”

From August to October, oil prices climbed between 7.02 percent (for high-octane gasoline) and 15.61 percent (for diesel) against just 0.21 percent and 3 , 97 percent from June to August.

Ridon noted that the current price volatility in the world market started from October 4-6, when Dubai crude prices rose 8.38%.

He said a suspension of taxes on petroleum prices would immediately lead to a 25 percent cost reduction, assuming petrol prices were P70 per liter.

Based on Infrawatch PH’s estimates, the proposal will help bring current fuel prices down to their average price over the past four months, with generic gasoline prices ranging between 45.10 pesos per liter (June 22 ) and 45.80 pesos per liter (August 26) and generic diesel prices varying between P 36.5 per liter (June 22) and P 36.6 per liter (August 26).

“This gives the public the opportunity to prepare for gradual price adjustments should the suspension lift, when new fiscal measures are implemented to more adequately respond to price volatility in the international oil market. while balancing revenue and public impact, ”Ridon said.

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