Return of OPSF to cost govt $20-billion a year

THE government said it stands to lose billions of dollars should Congress revive the Oil Price Stabilization Fund (OPSF) to address recent increases in fuel prices.

Addressing a forum by the Economic Journalists Association of the Philippines, Department of Energy (DOE) Undersecretary Jay Layug said it will cost the government about $20 billion a year if the bill reviving the OPSF passed in both houses of Congress.

“We would need at least $1.5 billion to $2 billion per month to move to regulation again. What does it show us? If the government can afford it, why not? But, obviously, at current prices, the government cannot afford it, even if it means taking out the pork barrel, it will not work,” he said.

Layug said that past experience showed that the implementation of the OPSF, as a mechanism to protect consumers from high oil prices, created a huge fiscal burden for the government.

In 1990-1991, the OPSF deficit reached as high as P16 billion, which the government had to shoulder by infusing taxpayers’ money into the fund.

Several lawmakers have urged the government to again control increases in the prices of petroleum products, filing for the purpose House Bill 2569, which seeks to repeal Republic Act 8479 or the Downstream Oil Deregulation Act of 1998.

“If we want a long-term regulated shift it must be studied thoroughly,” Layug said.

He said the DOE is discussing with the Department of Finance a temporary “fuel assistance program” that will last for 30 days as a short-term solution to the oil price hikes.

“We have to emphasize that the fuel assistance program is very temporary, because it’s the call of the time. We only have one month for this as soon as we get the approval from Malacañang, we will start to print the cards,” the official said.

The program, which all public utility vehicles can avail of, will likely require between P400 million and P500 million, which will be sourced from government savings or excess revenues.

The DOE had ordered oil companies to raise their minimum inventory levels so they could mitigate the impact of high oil prices. –LAILANY P. GOMEZ, Manila Times