The P500-million increase in the 2023 budget for direct fuel subsidies or "ayuda" to public utility vehicle (PUV) drivers will help the government cope with uncertainties in the world oil market.
Quezon City 4th district Rep. Marvin Rillo of the House Committee on Appropriations gave this explanation for the hike in the particular budget item, which now sits at P3 billion.
“The P500 million increase from P2.5 billion to P3 billion is factored into the 2023 General Appropriations Law,” Rillo said, referring to the P5.268-trillion national budget for this year.
“There’s really no telling where oil prices will be in the months ahead, considering that Russia’s invasion of Ukraine is still ongoing, so the government has to be ready to sustain subsidies to the most vulnerable sectors,” noted the neophyte congressman.
“The upward adjustment is meant to cushion a greater number of public transport drivers from elevated fuel prices,” Rillo said.
The Fuel Subsidy to Transport Sector Affected by Rising Fuel Prices Program extends financial assistance to drivers of PUVs, including those providing full-time ride-hailing and delivery services.
The Land Transportation Franchising and Regulatory Board (LTFRB) delivers the aid via cash cards worth P6,500 each issued by the state-owned Land Bank of the Philippines (LBP), or via fuel vouchers redeemable at gas stations.
Rillo said the 2023 national budget also includes P490 million for the Fuel Assistance to Fisherfolk Program of the Department of Agriculture (DA).
“There’s also another P510 million for the DA’s Fuel Assistance to Corn Farmers Program,” he said.
Rillo said the release of the subsidies would be triggered “when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) for three months reaches or exceeds $80 per barrel".
As of last week, Dubai crude oil futures contracts for delivery in February settled at $81.82 per barrel, while those for delivery in March settled at $81.25 per barrel.
In the wake of Russia's invasion of Ukraine, world oil prices soared to more than $120 a barrel on concerns of supply disruptions. But prices have fallen sharply since then.
Russia is the world’s third-largest oil producer, accounting for 12 percent of global output.