DOE seeks more oil price discounts

By Myrna Velasco

The Department of Energy (DOE) has been prompted to seek another round of price discounts from the oil companies as the government becomes fidgety over the financial brunt of prohibitive pump prices to Filipino consumers.

NO TRAIN YET – The Department of Energy said the recent increase in fuel prices must not be attributed to the impending fuel excise tax, which does not apply to old fuel stocks. (Kevin Tristan Espiritu) (Kevin Tristan Espiritu/MANILA BULLETIN FILE PHOTO)

This after oil companies implemented two rounds of big-time hikes in pump prices in the last two weeks for a total of P2.70 per liter for gasoline, P2.35 for diesel and P1.95 for kerosene.

DOE Assistant Director Rodela I. Romero confirmed that they had formally sought the support of the oil industry for second batch of cost discount to the public transport in view of the incessantly rising oil prices.

She said the target is for higher discounts in pump prices for public utility vehicles – from what was initially enforced at P1.00 per liter on March 1, the period when excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act had been implemented full swing.

“We are requesting them (oil companies) to expand or increase the number of stations offering discounts,” Romero said.

She noted that the targeted amount is not fixed this time, but the energy department is eyeing that discount rates will be set higher from where they are at currently.

The energy official added that other form of corporate social responsibility (CSR) programs, especially for the public transport segment and other marginalized sectors equally affected by soaring oil prices, will be inordinately encouraged.

DOE Assistant Secretary Leonido Pulido III further qualified that the meeting with the oil companies this week, “was to discuss how we could help consumers with the increasing international oil prices.”

On Wednesday, the DOE’s Oil Industry Management Bureau (OIMB) also made its rounds at oil firm stations to countercheck if there are some players who have been taking advantage of the situation.

In March, three oil companies – Petron Corporation, Pilipinas Shell Petroleum Corporation and Phoenix Petroleum Philippines Inc. -- have formally committed to the energy department on the “price discount program” for the transport sector. This was sealed then through a memorandum of agreement they signed with Energy Secretary Alfonso G. Cusi.

The intent at that time, according to the energy chief, had been to ease the transport sector’s agitation for fare hikes that may prove detrimental to the public.

The DOE explained that the CSR programs “basically expanded the oil companies’ existing discount programs for public utility jeepneys (PUJs), which includes the increase in the number of participating retail stations, higher discounts and inclusion of other public utility vehicles (PUVs).”

The discount program coverage included at least P1.00 per liter discount of liquid fuels to PUVs – primarily jeepneys, taxis as well as other modes of public transport.

Relative to that, the oil companies have also been mandated “to provide a designated lane for PUVs,” and that additional privileges and promotional offers are encouraged, especially if these will benefit the public transport sector.

With global oil prices already inching close to the US$80 per barrel, Malacanang and the DOE are now reviewing policy options on prospective suspension of TRAIN excise taxes for petroleum products if high prices are sustained within prescribed timeframes.