Energy Secretary Raphael P.M. Lotilla said President Marcos wants to reduce the trigger period for fuel subsidy from three months to one month to mitigate the current high oil prices.
The change in language would be made in the 2024 General Appropriations Act provision on fuel subsidies for the transport sector, Lotill said.
The goal is to simplify the requirements for fuel subsidies and make the process more efficient.
Fuel subsidies are government actions to lower energy production costs and make prices more affordable for the public. The trigger period currently requires the Dubai price per barrel to exceed $80 for three months to activate the provision of subsidies.
The subsidies will primarily affect public utility vehicles (PUVs) such as tricycles and jeepneys. The release requirements for the fuel subsidies will be simplified.
The Department of Budget and Management, the Department of Transportation, and the Department of Energy will collaborate on establishing the guidelines for the increased requirements.
Gov't sets quicker activation of fuel subsidy program
At a glance
In an effort to mitigate the current oil prices, President Marcos wants to reduce the trigger period for fuel subsidy from three months to one month, the Department of Energy (DOE) said.
In a statement, Energy Secretary Raphael P.M. Lotilla said that Malacañang wants to change the language of the 2024 General Appropriations Act provision on fuel subsidies for the transport sector to minimize the trigger period and be able to simplify its increased requirements.
A fuel subsidy is an action made by the government to lower the cost of energy production and becomes a financial aid as its goal is to make the prices more affordable to the public.
Lotilla explained the trigger period by stating, “Whenever the Dubai price per barrel exceeds $80 for three months, then that will trigger the provision of subsidies for the transport sector.”
“With the simplification, we will release the subsidies in a shorter period of time,” he added.
He also said that the subsidies will affect transportation, specifically public utility vehicles (PUVs), such as tricycles and jeepneys.
The Energy chief then elaborated on the simplification of release requirements for the fuel subsidies.
The guidelines for the increased requirements must be agreed upon by the following government agencies: the Department of Budget and Management (DBM), the Department of Transportation (DOTr), and the DOE.
“This can be released upon the finalization of the list of beneficiaries by the DOTr for those which have franchises, and then by the Department of Interior and Local Government (DILG) for those tricycle drivers, and the Department of Trade and Industry (DTI) for delivery service drivers,” he said on delegating the guidelines.
Furthermore, the DOE also said that Marcos wants the transport sector to push through with the electrification process because of its cost-efficiency.
Lotilla stated that this will be done by placing more charging stations and that the transport sector will receive more benefits from this solution.
He also compared the significant prices between electric and gas and/or diesel vehicles to which can contribute to the e-transport shift.
“[From a fuel standpoint] those using gasoline per kilometer (km) run is at P5.30. But the light-duty electric vehicles are P1.26 to P1.90 per km,” said the energy secretary. “Whereas the cost for those running on diesel is at P4 per km.”
Moreover, the cost of gasoline is around P70 per liter, while diesel is estimated to be P66 per liter. (Gabriell Christel Galang)