With President Ferdinand "Bongbong" Marcos Jr. now at the helm and fuel prices still giving everybody headaches, 1-Pacman Party-list Rep. Mikee Romero is pushing for the the revival of the old Oil Price Stabilization Fund (OPSF) created by the first Marcos administration in 1984.
“We should revive the OPSF or establish a similar buffer fund, which the government could use to avoid frequent adjustments in the pump prices of oil products due to fluctuations in the cost of crude oil in the world market and in the peso-dollar exchange rate,” Romero said in a statement Monday, July 11.
He said there are weekly wild swings in domestic pump prices, with the price of diesel projected to go down this week by at least P5 per liter after going up by more than P6 last week.
Romero, an economist and former deputy speaker, said prices would remain “volatile and elevated” because of the Russia-Ukraine war and the continued recovery of many nations from the Covid-19 pandemic. Thus the need for a buffer fund to absorb price spikes, he stressed.
The OPSF was a buffer mechanism devised by Marcos Jr.'s late father, former President Ferdinand Marcos Sr. The latter was Philippine president from 1965 to 1986.
Romero pointed out that such mechanism would work in such a way that it would absorb certain price increases so these would not be passed on to the public.
He proposed that the fund be sourced from higher excise taxes imposed on diesel, gasoline, cooking gas, and other oil products under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
“Since the government is not agreeable to the suggested suspension of excise taxes while the cost of crude is above $80 per barrel, we could use part of these impositions as a price stabilization fund to provide relief to the public from increased fuel and consumer prices,” the party-list solon said.
Marcos Sr. created the OPSF under Presidential Decree (PD) No. 1956, issued on Oct. 10, 1984.
Under the decree, the OPSF was sourced from fuel taxes and was used “to reimburse the oil companies for cost increases on crude oil and imported petroleum products resulting from exchange rate adjustment and/or increase in world market prices of crude oil".
The OPSF was administered by the then ministry (now department) of energy, which Marcos Sr. subsequently authorized to invest in fixed-income instruments with the earnings accruing to the stabilization fund.