Government drafting P500-M plan for transport sector

Published by rudy Date posted on March 26, 2011

MANILA, Philippines – The government is drafting a P500-million nationwide assistance program to enable the transport sector to purchase diesel at P3 per liter lower than current prices, the country’s top energy official said yesterday.

Energy Secretary Jose Rene Almendras said as soon as the draft executive order outlining the assistance to the transport sector is approved, the government can start the implementation of the program aimed at mitigating the impact of high fuel prices to the sector.

“The draft EO is asking government agencies to align together to cushion the impact of high fuel prices to the transport sector. We’re trying to intervene into a situation where we are very limited in our ability to provide subsidies or check on the pricing of petroleum. So what were trying to do is cushion on certain sectors so it doesn’t create inflation,” Almendras said.

The plan involves the issuance of fuel cards to the transport sector once the EO is approved by Malacañang. The fuel cards will enable accredited transport groups to purchase diesel P3 per liter lower than market prices. Diesel currently sells at around P45.25 to P47.25 per liter.

Almendras said the card will have different monetary values, depending on the type of vehicle and level of consumption. For a P1,000-card, for example, a jeepney driver can purchase P1,000 worth of diesel at P3 per liter cheaper.

He said the transport sector can use the fuel cards at all gasoline stations nationwide. The oil firms will also continue giving their respective discounts to the transport sector, he said.

Around 214,596 jeepneys, 27,886 buses, 6,648 mini-buses and a million tricycles nationwide are expected to benefit from the assistance, he noted. The cards will be given out only to legitimate franchise holders.

The energy chief said the amount that government will spend is “not a subsidy but an assistance” to the sector.

The government is expected to start the program in a “week and a half” and is expected to complete it within a month.

Almendras noted that government is looking at expanding the discount to other sectors to cover other means of transport. “We’re talking about food inputs, food transport, fishery assistance,” he said.

“We don’t look at it as a fund, but more as a mechanism of intervention. This is a pilot project… we might even expand the sectoral coverage,” Almendras said.

He said government may tap its “operating savings” to finance the assistance program. He earlier said they are looking at “windfall savings” from the value-added tax on petroleum to help the transport sector.

“There will always be people who will disagree (with the program),” Almendras said, but stressed that he believes that this is the right thing to do to help the transport sector at the moment. –Donnabelle L. Gatdula (The Philippine Star)

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