DOE asks Congress to amend Oil Deregulation Law

Robie de Guzman   •   October 20, 2021   •   442

The Department of Energy (DOE) has called on Congress to amend provisions in the Oil Deregulation Law to allow the government to address oil price hikes amid high global demand and tight supply.

In a letter addressed to Senator Sherwin Gatchalian and Pampanga Representative Juan Miguel Arroyo, the DOE asked Congress to amend the law “to provide a framework for the government to intervene in the sudden, prolonged oil price spikes, including the unbundling of the cost of petroleum retail products to determine their true and passed-on costs.”

Gatchalian chairs the Senate Committee on Energy, while Arroyo heads the counterpart panel in the House of Representatives.

The DOE cited several reasons for the prolonged oil price spike amid continuing rise in world market prices resulting from the sudden global increase in demand and an unanticipated lack of supply.

It said that the demand, which is estimated at 103.22 million barrels a day (as of October 16, 2021 vs. a supply of 100.32 million barrels/day) is attributed to the following:

  • the surge of economic activities due to the containment of COVID-19 as a result of measures adopted and implemented worldwide (i.e. mass vaccination, control of the Delta and other variants, Europe’s “no-lockdown” policy, and China’s economic boost). This led to a sudden demand in energy utilization, including the demand on oil products in the transportation sector like gasoline and diesel;

 

  • the stocking of petroleum products’ inventories as winter approaches to cover demand from October this year to March of next year, with stocking expected until February 2021;

 

  • slowed production due to the current global direction of sourcing energy from low-carbon emitting sources. This has limited the optimum level of production, causing the halt and event withdrawal of investments in the development and expansion of the fossil fuel industry;

 

  • International sanctions to oil-producing countries like Iran and Venezuela that stopped the drilling of oil companies and the buying of oil products from these countries;

 

  • Hurricane Ida a category 4 storm that hit the US gulf coast on August 29 had caused an estimated loss of US crude oil production by as much as 30 million barrels.

 

Before the pandemic, the latest recorded total worldwide supply was, more or less, 104 barrels a day.

To cope-up with the supply, the DOE said the Organization of Petroleum Exporting Countries (OPEC) committed to increase the production and supply of crude oil by 400,000 barrels/day.

The OPEC will meet on November 4 to discuss and reassess the situation.

The DOE said the Philippines utilizes the equivalent of 425,000 barrels/day, which is around 0.4% of the world supply.

The department assured it has met with the oil industry stakeholders to ensure supply while the problem persists, and asked if discounts could be extended to the public, especially to the public transport sector.

“Supply was assured and some companies (e.g. Jetti, Seaoil, Shell, Phoenix, Unioil) agreed to extend discounts to the public transport industry on top of existing discounts currently given like vaccination and loyalty incentives,” it added.

The DOE said it required the unbundling of the cost of retail products to determine their true and passed-on cost.

It maintained that the unbundling of oil prices would result in greater market transparency by establishing the trends in the prices of oil and finished petroleum products.

This, in turn, would help ensure a level playing field within the oil industry, while upholding the best interests of consumers, the DOE said.

 

House panel tackles proposed measures vs fuel excise tax

Maris Federez   •   November 8, 2021

MANILA, Philippines — The House Committee on Ways and Means put the proposal to suspend the imposition of additional excise taxes on fuel as the first order of business ahead of the resumption of Congress on Monday (November 8).

House Speaker Lord Allan Velasco said part of the agenda in the resumption of sessions in Congress is the prioritization of measures that will support the reopening of the economy amid the pandemic, following the series of price hikes on petroleum products.

The agenda includes the ratification of the 2022 national budget and the issue of fuel excise taxes.

Velasco said that while the country prepares for an expansive reopening of businesses, authorities must ensure that economic recovery is not impeded by other factors such as the price increases of petroleum products.

“As we prepare for the wider reopening of businesses, we must ensure that our economic recovery will not be hampered by unwelcome disruptions, such as the unimpeded sharp rise in the cost of fuel,” Velasco said.

The House panel is expected to come up with a substitute bill within the week that will guarantee an imposition of taxes on fuel products.

Excise taxes are provided for by law under the Tax Reform for Acceleration and Inclusion (TRAIN) law. —/mbmf (from the report of UNTV Correspondent Nel Maribojoc)

Suspension of fuel excise tax, detrimental to economic recovery — DOF

Maris Federez   •   October 28, 2021

 

MANILA, Philippines — The Department of Finance (DOF) expressed before the House Committee on Energy its opposition to the proposed suspension of excise tax on petroleum products.

The DOF warned that suspending the imposition of excise tax on fuel will cost the government about Php131.4 billion in revenue for 2022 which, according to the agency, is detrimental to economic recovery.

“The unrealized public spending and the investments from the foregone revenues will also be detrimental to our economic recovery and long-term growth,” said DOF director Euvimil Nina Asuncion.

Asuncion said that providing a targeted subsidy to the transportation sector will be more equitable than removing all fuel excise taxes which may only subsidize the consumption of higher-income households.

The Department of Energy (DOE), however, estimated suspending the excise tax on petroleum products will lower pump prices by about Php8 to Php10 per liter.

“We specifically proposed the suspension of the excise tax because of the urgency in addressing the plight our kababayans,” said DOE Secretary Alfonso Cusi.

House Committee on Energy chairperson Representative Juan Miguel Arroyo confirmed that he will push for the amendment of oil deregulation law and the suspension of the imposition of excise tax on fuel products. —/mbmf (from the report of UNTV Correspondent Nel Maribojoc)

Presyo ng mga produktong petrolyo, muling tumaas

Maris Federez   •   October 26, 2021

MANILA, Philippines — Muli na namang nagpatupad ng oil price hike ang mga kumpanya ng langis ngayong Martes (Oktubre 26).

Epektibo alas dose uno ng madaling araw, unang nagdagdag ng P1.15 sa presyo ng kada litro ng gasolina ang Caltex.

Itinaas naman nito ng P0.45 naman ang presyo ng kada litro ng diesel, at P0.55 naman sa kerosene.

Sunod na nagpatupad ng kaparehong dagdag-presyo sa gasoline, diesel at kerosene ang Shell, Petron, Seaoil at Flying V alas sais ng umaga ngayong araw.

Ang Unioil, Phoenix Petroleum, PTT Philippines, Petrogazz at Total Philippines naman ay nagpatupad din ng P1.15  na pagtaas ng presyo sa kada litro ng gasolina at P0.45 sa kada litro ng diesel.

Ang Cleanfuel naman ay magpapatupad din ng kaparehong dagdag-presyo sa gasolina at diesel simula alas kwatro uno ng hapon.

Ito na ang ika-siyam na sunod na linggo na nagpatupad ng price increase ang mga kumpanya ng langis sa bansa. —/mbmf

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