Pump prices soar to P70/liter in Palawan
Motorists and other consumers in the provinces probably don’t have much sympathy for Metro Manila residents who are still groaning from at least eight increases in the prices of petroleum products over the last two months.
Pump prices for premium gasoline just hit P70 a liter in El Nido, Palawan on Wednesday, with regular gasoline going from P64 to P67 a pop in Baguio City, diesel costing from P48 to just under P50 in Bohol, and kerosene crossing the P51 barrier elsewhere.
Those prices are as much as P12 higher—for gasoline at least—than in gas stations across the National Capital Region, Manila Standard research showed.
This developed as the Energy department has assured it will recommend the suspension of the excise tax on fuel for the second tranche of the tax reform package proposed by the government, once world oil prices hit the three-month average of $80 per barrel.
Acting on a directive from Energy Secretary Alfonso Cusi, the Department of Energy’s Oil Industry Management Bureau yesterday started a series of random inspection of fuel stations to ensure the quality and quantity of petroleum products amid the current spiraling prices.
“I hope it doesn’t go up any further,” a taxi driver named Antonio told ABS-CBN News in Baguio on Wednesday.
“Drivers don’t earn anything anymore,” he added, noting that local cabbies didn’t feel the effect of taxi fare hikes implemented last March.
“Fares are rising here because diesel prices are high too,” said June Aquino, a driver for a private firm, also from the country’s summer capital—where fuel must be trucked in from the lowlands.
OIMB officials have previously noted that transport costs have jacked up pump prices in Baguio and other hard-to-reach areas.
“Common sense dictates that the possible additional cost [for oil companies] should only be the transport cost,” OIMB Director Rino Abad also told ABS-CBN News.
In Makati, “Shelly,” a public-school teacher who asked to hide her real name, told the Standard the only relief she could think of for the high oil prices—and thus the rising costs of other commodities—was to work even harder and earn more money.
“For people like me who usually don’t get paid during the summer, we can only look for side jobs and sell stuff while waiting for classes to return, and with them our paychecks,” said Shelly, who teaches in an elementary school in Manila.
But it has been a tortuous summer so far for Filipino consumers, as the following oil price hikes took effect since March:
• May 22 – gasoline P1.60, diesel P1.15, kerosene P1
• May 15 – gasoline P1.10, diesel P1.20, kerosene P0.95
• May 1 – gasoline P0.85, diesel P0.70, kerosene P0.70
• April 24 – gasoline P0.40, diesel P0.65, kerosene P0.65
• April 17 – gasoline P0.35, diesel P0.55, kerosene P0.80
• April 3 – gasoline P0.90, diesel P1.00, kerosene P1.00
• March 27 – gasoline P1.15, diesel P1.10, kerosene P1.00
• March 6 – gasoline P0.50, diesel P0.30, kerosene P0.80
Oil prices worldwide have risen nearly 20 percent since January and topped $80 per barrel in intraday trading last Thursday for the first time since 2014, the DoE noted.
Research from Reuters and figures from the statistics portal Numbeo also showed that in developing economies such as the Philippines, fuel costs eat up around 8 to 9 percent of an average person’s salary. That compares to just 1-2 percent in wealthy countries such as Japan or Australia.
However, energy director Abad told reporters the existing excise taxes on fuel implemented since January this year under the Tax Reform for Acceleration and Inclusion Act or Train will stay.
“You cannot withdraw from that [first tranche]. It’s already there,” Abad said.
“What is in the law, what you have implemented, it is already there unless you amend the law,” he added.
Under the first tranche of the Train, oil prices went up by P2.65 per liter representing the excise tax and P0.32 per liter for the corresponding VAT totaling P2.97 per liter for gasoline.
Diesel also went up by P2.50 per liter to reflect the excise tax and P0.30 per liter for the 12 percent VAT totaling P2.80 per liter.
Under the second Train tranche, which will take effect starting January 2019, an additional P2 per liter excise tax will be implemented and P0.24 per liter representing VAT, totaling P2.24 per liter for both gasoline and diesel.
Abad said this is the amount that will be suspended once the department issues the certification that the $80 per barrel threshold is breached and once the Finance department confirms the same.
He said the department will take the average world oil prices from September to end November then submit the computation in the first week of December for certification whether it breached the threshold.
Abad, however, warned that oil prices may continue to go up in the short-term or up to six months if the ongoing global oil scenario persists. In some retail outlets, gasoline prices reached P60 per liter while diesel reached a high of P57 per liter.
“If the recent events persist, for example, sanctions, the Venezuela ongoing economic and political crises, and, of course, the objective of the Opec especially the Saudi Arabia to really achieve the $80 per barrel crude oil price, then the indication will actually on the short-term lead towards the increases of price,” Abad said.
He said world oil prices may also stabilize once other suppliers step in to cover the supply vacuum.
“In cases like this, other suppliers will always look for that vacuum of the supply glut or the supply disruption. Depending on how fast they will react to that and supplement or complement the existing supply to cover the vacuum, then if that happens, the price will again stabilize,” he said.
Abad urged said government is already looking at several mitigating measures including the promotion of demand-side management to mitigate the effect of the high oil prices to the public.
Malacañang had earlier assured the public that measures will be in place to protect consumers from the incessant increase in oil prices, including the suspension of the excise tax on fuel once the trigger level of $80 per barrel becomes consistent for three months.
“Excise taxes will be suspended if they [oil prices] reach a certain amount, if I’m not mistaken, $80,” Presidential Spokesman Harry Roque said.
Roque made this statement after the local oil industry announced on Monday that it has raised gasoline prices by P1.60 per liter, diesel by P1.15 per liter and kerosene by P1 per liter—the second week in a row when pump prices went up by more than P1 per liter.
Data from the Senate committee on energy showed that from January to May, gasoline prices already increased by P8.07 per liter while diesel went up P8.95 per liter.
Noting that Filipinos are already bearing the brunt of the price increases, Senate energy committee chairman Senator Sherwin Gatchalian warned that the administration must plan “in the event that crude prices reach the $100-per-barrel threshold in the global market.”