Malacañang helpless on oil price increases

MANILA, Philippines – As fuel prices go up anew today, Malacañang admitted it was helpless in the face of the steady increase, saying the nation’s only option at the moment is to “follow the market forces.”

On Tuesday, Pilipinas Shell Petroleum announced that it would adjust the prices of its petroleum products twice a week to immediately reflect changes in fuel prices in the world market and in foreign exchange.

Shell raised its gasoline prices by 70 centavos per liter effective today. Diesel and kerosene prices are also up by 25 centavos per liter.

Other oil companies are expected to follow suit.

“It’s dictated by market forces,” presidential spokesman Edwin Lacierda told reporters yesterday.

He said the government, through the Department of Energy (DOE), is constantly monitoring the price movements to make sure every increase is justified.

“What’s important is the DOE monitors the prices and knows the range within which prices are either raised or slashed,” Lacierda said.

“Through more frequent and timelier adjustments, we aim to help cushion the impact of higher oil prices on the public,” said Roberto Kanapi, Shell vice president for communications.

“As part of the deregulation process, we constantly assess the needs of our customers and look at ways to best address them,” he added.

Energy Undersecretary Jose Layug told state-run radio dzRB of the likelihood of a new round of oil price increases.

Meanwhile, Sen. Antonio Trillanes IV sought the collection of “windfall profit tax” from oil companies as means “to moderate their greed.”

Through Senate Bill 2959, Trillanes seeks the imposition of 50 percent windfall profit tax on profits of oil companies exceeding 12 percent but less than 20 percent of their paid-up capital per year and an 80 percent windfall profit tax on the profits of oil companies in excess of 20 percent of their paid-up capital per year.

“The problem is that, under the current deregulated system, government is virtually helpless in checking the apparent abuses by petroleum industry players in increasing or refusing to decrease the prices of petroleum products even when warranted by market forces,” Trillanes said.

“The situation is aggravated by the lack of transparency in the formula being used by petroleum companies in order to arrive at their prices and the apparent incompetence or indifference of the officials of the Department of Energy in addressing the situation,” he said.

“The consuming public is virtually at the mercy of the oil industry cartel, which has gleefully taken advantage of the situation at the expense of the entire populace,” he added.

Trillanes said his bill is not intended as a revenue generation measure but as an exercise of the police power of the state. He said funds raised from windfall tax may be used to improve the government’s delivery of services.

“I believe that this measure would effectively discourage oil firms from further engaging in profiteering. Hopefully, it would provide our people with much needed relief from the endless rounds of oil price increases which we have seen in recent weeks,” Trillanes said.

Second front

While fending off criticism for the skyrocketing fuel prices, the Aquino administration also has to parry rebuke from the opposition for the looming hikes in LRT and MRT fares.

Isabela Rep. Rodolfo Albano and Zambales Rep. Milagros Magsaysay, in separate statements, said the fare hikes would further burden the people who are still reeling from the steady fuel price hikes.

Magsaysay said the fare hikes should be deferred “until such time that the oil prices in the world market stabilize.”

“Now is not the best time to impose price hikes on the train fares because consumers and commuters are already reeling from high cost of goods and gasoline due to increasing prices of petroleum products in the world market,” she said.

“A P5-P10 increase would seem paltry to some but for the daily commuters taking the train to and from their place of work, this would translate to an additional P260 a month, and for those traversing long distances could result in as much as P400 a month,” she added.

She said for an ordinary minimum wage earner, the increase is equivalent to almost a day’s wage.

Albano said the planned fare hikes are ill-timed and “will create more trouble than a solution to the economic crisis.”

“Is there a plan to pull down the popularity of the President? If they pushed through with this, the President’s popularity and approval rating will surely be affected in the next survey,” Albano said.

“There’s no doubt that the government will have a huge collection in fees but in the final analysis, it is our people who will suffer much,” he said.

“Not now, mahirap ang buhay ngayon (life is hard),” Sen. Joker Arroyo, for his part, said referring to the MRT and LRT fare hikes. “I think some senators are ready to file a resolution that would ask the government not to proceed with the planned fare and toll increases.”

Arroyo said administration and opposition senators have signified support for the proposed resolution. He did not name names.

“The government has no right to inflict additional tax charges and burden the people if in return they will not spend public money they have already collected from the people,” Arroyo said.

“This government is hoarding a lot of the public’s money. They must spend it for the people… that is what taxation is all about,” he said.

“Why is it that the government has lots of money, they don’t spend? Isn’t it one of the reasons why we have crisis is that taxes are being collected and not being spent? When the government taxes and citizens’ pay, the citizens expect that the money they give to the government should be spent, not kept,” the senator said.

“That’s the complaint right now. It’s not the question of them hoarding the money. People pay taxes and so they expect something in return, so they should spend that,” Arroyo added.

He also rebuffed the administration’s plan to divert P8 billion in government subsidy for the LRT and MRT to other areas in the country to help boost the country’s growth.

He said Transportation Secretary Manuel Roxas II may “mean well” in pushing for higher MRT and LRT fares but that the administration should be sensitive to the needs of the people.

For Manila Auxiliary Bishop Broderick Pabillo, an increase in the salaries of workers “is necessary” to help ease the impact of adjustments in MRT and LRT fares.

“The people are already burdened (with rising prices of goods). How can the people survive if the prices are going up but their salaries are not?”

Lipa, Batangas Archbishop Ramon Arguelles said ordinary Filipinos comprise the bulk of passengers of MRT and LRT and thus would be the most affected.

“Aside from the fare hikes, they should also increase the salaries of the people and to provide more livelihood to the people,” he said in an interview over Church-run Radio Veritas.

“What is intended for public should be used for public service,” he said.

Meanwhile, the militant Bagong Alyansang Makabayan (Bayan) vowed to fight the MRT and LRT fare increase in the courts and in the streets.

“The increase in fares is a callous act. The reduction of subsidy is patently anti-commuter. The reason why government is spending a lot to subsidize is because it is paying the debts from an onerous contract,” said Bayan. –Delon Porcalla (The Philippine Star) with Rhodina Villanueva, Evelyn Macairan, Christina Mendez, Paolo Romero