Filipino motorists may have their first "price rollback relief" next week, but the Department of Energy (DOE) is still stepping up on preparation for contingency measures in case the projected $100 per barrel oil will assault on oil markets this year.
International oil prices crashed to the level of $90 per barrel in the initial two trading days this week, reversing the $94 per barrel record high logged in the prior week and that was mainly attributed to "high optimism" on prospective Iran nuclear deal following the resumption of negotiations in Vienna, Austria this February 8.
There are expectations that if the Iran nuclear deal will turn out successful, additional crude barrels could be injected into market and that will ease the soaring prices – although, that is seen to be very temporary.
While the world oil market still navigates a turbulent pathway due to tight supply worries and the unresolved Russia-Ukraine standoff, Atty. Rino Abad, director of the DOE’s Oil Industry Management Bureau (OIMB) indicated that the government is relentlessly exploring the "grant of subsidy or assistance" to targeted segments – primarily the public transport, in case global oil prices will skyrocket again in the weeks or months ahead.
“In the absence of price control under the deregulated regime and the overall subsidy policy just like the previous OPSF (Oil Price Stabilization Fund), the prevailing policy now is for the government to offer targeted relief assistance,” he explained.
Abad emphasized that the government will continue to enforce the state-sponsored “Pantawid Pasada” program – and that has been the anchor of financial support given to the public transport sector when oil prices were on wild upswings in 2018, 2019 and 2021.
To recall, the government released P1.0 billion subsidy to public utility vehicles (PUVs) last year when global oil prices have been on astronomical rise to the mid-$80s per barrel level – and the main intent then was to stamp out bids for transport fare hikes.
Beyond the government-endowed subsidy, Abad specified that the DOE has also been exercising "moral suasion" on the industry players so they will extend their own ‘discount promos’ to the financially-burdened motorists.
“The industry continuously offers discounted prices at the retail level as part of its promo programs,” the energy official conveyed, noting further that this has been a time-tested formula in the oil sector when there are incessant escalations in oil prices.
Abad highlighted the most significant contingency measure being pushed by the State is the six-month suspension of excise taxes on petroleum products under the Tax Reform for Acceleration and Inclusion (TRAIN) Act; which is now going through the maze of deliberations in Congress.
“The House Ways and Means Committee has finalized the amendment to the TRAIN law on suspension of excise tax to diesel and gasoline at the TWG (technical working group) level last year, hence, it can be readily used for submission to the committee level for further discussion,” the energy official said.
If the excise taxes will be suspended, gasoline prices will be reduced by P10.00 per liter; and diesel prices could come cheaper by P6.00 per liter.