Senatorial candidate and Sorsogon Governor Francis ‘’Chiz’’ Escudero on Saturday, March 12 strongly suggested that government consider realigning funds or passing a supplemental budget as he warned of more oil price hikes that would require greater fuel subsidy for affected sectors in the coming months.

This, as Escudero lauded the release of the P2.5-billion fuel subsidy by the Department of Budget and Management (DBM) but said this would not be sufficient to support transport and agriculture workers, given the escalating world oil prices.

“This is good but clearly not enough if it is the first and the last. The spike in fuel will continue for several weeks, probably even a couple of months. Either Congress passes a supplemental budget or the president realigns some funds,” he said.

The 2022 General Appropriations Act (GAA) allocates P2.5 billion for fuel subsidies under the Department of Transportation (DOTr), and another P500 million under the Department of Agriculture (DA).

Some P5 billion for fuel subsidy is listed as unprogrammed appropriation, which can only be accessed if government revenue collection exceeds the revenue target.

“Congress needs to act swiftly because the process of passing a supplemental budget takes time, and it’s election season so expect many legislators to be preoccupied with their campaigns. The quickest way would be for the President to realign funds or tap unprogrammed appropriations following the prescribed conditions,” Escudero, who served as senator from 2007 to 2019, said.

The Department of Energy (DOE) has warned that the retail prices of fuel could skyrocket to P100 per liter, depending on the price of oil in the world market. Public jeepney operators have already requested a P1 fare increase.

President Duterte’s economic team has recommended increasing the transport sector’s subsidy from P2.5 billion to P5 billion, and the agriculture sector’s subsidy from P500 million to P1.1 billion, or a total of P6.1 billion in fuel subsidy for distribution in March and April.

The appropriated fuel subsidies in the GAA will benefit 377,443 people, receiving P6,500 each from the DOTr; and 79,000 beneficiaries receiving P6,329 each from the DA.

For public utility PUVs that consume 60 liters a day, the subsidy could cover the equivalent of seven days of fuel, given the difference in average oil prices between December 2021 and March 2022.

“The national budget is discussed and passed a year ahead, so the conditions at the time of preparation are different from the situation at the time of implementation. Because of the volatility of the oil market now, we could be facing an energy crisis that will jack up the cost of electricity and basic goods. We need funds to cushion the impact of a possible crisis on all sectors and households,” Escudero pointed out.

The latest oil price hikes on March 8 reflect a total net increase of P13.25/liter for gasoline, P17.50/liter for diesel, and P11.40/liter for kerosene this year alone.

`Escudero reiterated his proposal to create a Strategic Petroleum Reserve to allow the government to stockpile oil when the prices are low and then release this to the market as needed to stabilize prices.

“It’s good that the Philippine National Oil Corp. (PNOC) has already met with oil companies to check their spare storage capacity, so at least one long-term plan is moving,” Escudero said.

“We have to look beyond the current challenges and see how the Philippines can be less vulnerable to global oil price hikes. This includes promoting and expanding renewable energy use,’’ he added.