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Groups renew call to repeal oil deregulation law after today’s big-time price hike

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By Nuel M. Bacarra

Transport group Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide (PISTON) condemned the big-time oil price hike that took effect today, August 8, and demanded that the Ferdinand Marcos Jr. government repeal the Oil Deregulation Law and suspend the expanded value added and excise tax on petroleum products.

According to the group, the increases on fuel prices are triggered by the Downstream Oil Industry Deregulation Act (Republic Act 8479) that had been wreaking havoc on the livelihood of public utility vehicles (PUV) drivers and small operators since the start of its implementation in 1998.

For the fifth consecutive week since last month, oil companies implemented price increases, this time to an average of P4.10 increase per liter of diesel and P0.50 per liter of gasoline.

Today’s oil price increase had been the steepest since July 11.

PISTON national president Mody Floranda said, “Oil price increases in the country are expected by the Department of Energy to continue in the succeeding weeks, and the inaction of the Marcos administration (on petitions to repeal the law) is a direct attack on the livelihood of the drivers and the people.”

In the last four weekly oil price hikes alone, PISTON said jeepney drivers lost an average of P90.00 per day or a total of P2,250.00 a month.

The group pointed out that this development came after Marcos Jr. said in his State of the Nation Address less than three weeks back that Filipinos are benefitting from so-called reduction in prices of commodities.

Meanwhile, Bagong Alyansang Makabayan (BAYAN) clarified that the latest spate of price hikes could not be blamed on oil exporting countries alone.

Bayan secretary general Raymond Palatino said Saudi Arabia’s plan to cut down oil production by one million barrels a day has yet to take effect by September.

“There’s no actual cut yet, no reduction in production yet. [There is] only news that they will reduce production and yet the prices already increased,” Palatino complained.

“The one that really benefits from the oil price hikes is the government because of its excise tax and VAT (value-added tax) on oil products. It is fine if the government really uses it for the people. But based on their budget (2024) proposal, where will it go? To confidential funds, foreign trips, Maharlika!” Palatino added.

KADAMAY members in Quezon City hold a protest action against the recent spate of oil price hikes. (Kadamay Facebook Page photo)

The Department of Transportation (DoTr) earlier said the government is set to release P2.95 billion worth of fuel subsidies for PUV operators and drivers “to cushion the impact of the increase in fuel prices”.

The financial assistance package will also cover tricycle drivers and delivery riders, the agency said last Sunday.

“We will make sure that the assistance to our PUV drivers will be distributed immediately so they can use it, pay for their fuel and improve their daily income,” transportation secretary Jaime Bautista said.

PUV drivers will receive a one-time cash grant from the Land Transportation Franchising and Regulatory Board while the Department of Interior and Local Government and the Department of Information and Communications Technology will hand out the financial assistance to tricycle drivers and delivery services riders, respectively.

The financial aid will be given through the beneficiaries’ cash cards, the government announced.

Yesterday, Monday, members of the urban poor group Kalipunan ng Damayang Mahihirap (KADAMAY) held a protest event at the corner of Quezon Avenue and Agham Road in Quezon City against the latest series of oil price hikes.

KADAMAY said they also demand the abolition of the excise tax on oil prices and the junking of the oil deregulation law.

The group said that in addition to the fact that most PUV drivers are residents of urban poor communities, the series of oil price hikes also drive the prices of basic commodities to go higher and cause further hardships to the people. #

Farmers reiterate call for VAT removal on oil products

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‘Mabuti pa ang mga turista’–KMP

On the eve of another round of increases in prices of petroleum products, the Kilusang Magbubukid ng Pilipinas (KMP) reiterated its demand for the removal of value added taxes (VAT) on diesel, gasoline, kerosene and cooking gas.

Reacting to the government’s announcement that President Ferdinand Marcos Jr. has approved VAT reimbursements to foreign tourists, the farmer’s group said the government should first provide relief to low-income families.

“Unahin muna dapat ng gobyerno na tugunan ang panawagan ng publiko na alisin na ang VAT sa langis para bumaba ang presyo ng mga produktong petrolyo. Pero ang ginawang prayoridad ng Pangulo ay bigyan ng VAT refund ang mga turistang papasok sa bansa,” KMP chairperson Danilo Ramos said.

(The government should first approve demands to remove the VAT on oil in order for prices to go down on petroleum products. But the president instead prioritized VAT refunds for foreign tourists.)

Based on the Department of Energy’s price monitoring, the net increase so far this year is ₱5.90 per liter for gasoline, ₱2.05/L for diesel, and ₱3.20/L for kerosene.

Estimates show that gasoline prices will increase tomorrow by ₱1.30/L, Diesel by ₱1.00/L, and Kerosene by ₱1.35/L.

A big-time price increase on LPG is also expected starting in February or as much as ₱9.50 per kilogram or ₱104.50 per LPG cylinder, the KMP revealed.

KMP’s Ramos added that government’s VAT Refund Program for foreign tourists is part of Quick Wins recommendations from the Private Sector Advisory Council that were approved by Marcos Jr.

“This shows the President’s unending favor to private companies and the private sector over public interest,” Ramos added.

Poor Filipinos first

KMP said scrapping the oil excise taxes under the Tax Reform for Acceleration and Inclusion Law will provide immediate relief to Filipinos and help control the rising inflation.

Removing the excise tax and VAT on oil will remove P6 per liter from diesel, P5.35 per liter for unleaded gasoline, and P3 per kilogram of LPG, the group said.

Oil revenue losses can be offset by also suspending the corporate income tax cuts under the Corporate Recovery and Tax Incentives for Enterprises Law.

“Reducing indirect consumption taxes such as on oil and increasing direct taxes on income makes the tax system more progressive,” the KMP said.

The farmers’ group said Filipinos are still reeling from the damaging effects of frequent oil price hikes in 2022.

Oil prices hiked for 11 consecutive weeks in January to March of last year.

The net year-to-date price increase in 2022 was at ₱14.90/L for gasoline, ₱27.30/L for diesel, and ₱21.30/L for kerosene. # (Raymund B. Villanueva)

Colmenares urges repeal of VAT and excise tax on fuel to lower prices

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Senatorial candidate Neri Colmenares presented five proposals to mitigate effects of rising oil prices he blames not just on the crisis in Eastern Europe but on government’s high taxes on petroleum products.

Colmenares, chairperson of the Makabayan block of progressive parties, said they have long proposed the five measures in response to the oil crisis that are likely to very soon affect prices of essential goods as well.

Colmenares said the first proposal is for the immediate repeal of the value added tax (VAT) and excise tax imposed on fuel that would result to an average relief of P27 per liter.

“We have done away with the VAT on water supplied by Manila Water and Maynilad; we must follow suit with fuel,” he said.

The second proposal is to unbundle oil prices, Colmenares said, that would provide for transparency in the pricing of petroleum products by the oil companies.

“By seeing where every peso spent per litter goes, we can easily check for overpricing and market abuse. This proposal is contained in House Bill No. 10386,” he added.

The senatorial candidate said the next three proposals are:

• The repeal of the Oil Deregulation Law and enactment of a new policy framework to ensure that oil prices are within reasonable costs and regulated, as contained in House Bill No. 4711;

• The buy-back of Petron to provide the public with a state-owned alternative to acquire oil and petroleum products, as contained in House Bill No. 244. Ramon Ang has already expressed willingness to sell Petron; thus, the Government must take on this offer and seek a just take-over of the company;

• The establishment of a National Petroleum Exchange Corporation to serve as the central import and distribution hub of oil and petroleum products, ensuring lower prices through economies of scale and helping oversee oil prices in the market, as contained in House Bill No. 4712.

Colmenares’ proposals came after prices increased for the 10th straight week last Tuesday by at least P3 per liter on gasoline and nearly P6 per liter on diesel, bringing prices to about P80 and P60 per liter, respectively.

The recent hikes in oil prices are the highest in more than a decade, pushing transport groups to hold protest rallies calling on the government to stop the increases.

Earlier, energy secretary Alfonso Cusi warned that gasoline prices may reach to about P100 per liter if the conflict between Ukraine and the Russian Federation is not immediately resolved.

Colmenares said the Philippine government does not have its hands tied in dealing with rising fuel costs and must act with urgency to cushion the country from the crisis.

“We can overcome this crisis if the government would stop imposing burdensome taxes and implement enough regulation on the oil industry,” Colmenares said Filipino.

No reason to hike prices yet

Meanwhile, Bagong Alyansang Makabayan (BAYAN) said in a separate statement that oil companies have no reason to increase prices as a result of the conflict in Eastern Europe.

“The current automatic price adjustments under deregulation are unjust because these are driven by market speculation and because the current inventory of the big oil companies were purchased at a much lower price yet will be sold at a much higher price,” BAYAN secretary general Renato Reyes said.

Reyes also criticizd the refusal of the oil companies to make a full disclosure of their pricing mechanisms.

“The pricing by the oil cartel is untransparent because oil companies refuse to unbundle the price components of their products,” he said.

Reyes added is is unjust that government profits from the people’s misery brought about by high taxes on the already overpriced oil products, including a 12% VAT and excise taxes.

Reyes said that BAYAN’s demands the removal or suspension on huge taxes on oil products such as the excise tax and VAT as well as the imposition of strict regulations on the industry “in light of market speculation, overpricing and utter lack of transparency in pricing.”

“The people can no longer bear the oppression by government and the oil companies. The government should act now to lower oil prices or face more protests from the people,” he said. # (Raymund B. Villanueva)

‘DOE has become a mere announcer of oil price hikes’

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“Oil price hikes have direct and lasting effects on agricultural and fishing production cost, cost of farm inputs, and overall cost of living for Filipinos. Throughout the deregulation era, the Department of Energy (DOE) has become a mere announcer of oil price hikes. Deregulation under Duterte also caused much damage to the livelihood and economic status of Filipinos.” — Rafael ‘Ka Paeng’ Mariano, Chairman Emeritus, Kilusang Magbubukid ng Pilipinas

One-fourth of increase: TRAIN aggravates oil price hikes–IBON

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Government is wrong in downplaying the contribution of the Tax Reform for Acceleration and Inclusion (TRAIN) law on recent big-time oil price hikes, research group IBON said.

The price of fuel products combined with the TRAIN increased since year-end 2017 to Php10.20 per liter for diesel, Php11.41 for kerosene, and Php15.14 for gasoline as of last week.

These prices now include excise taxes and value-added tax (VAT), respectively, said IBON.

The price of diesel has increased to Php41.70/liter from Php31.50 at the start of the year, for instance, while the price of kerosene has increased to Php50.40/liter from Php38.99/liter as of year-end 2017.

The price of gasoline is now Php56.47/liter from Php41.33 as of year-end 2017.

The adjustment in the price of oil products has been attributed to the increase in the Mean of Platts Singapore (MOPS) prices and changes in the PH Peso–US Dollar exchange rate.

MOPS for gasoline prices has had a net increase of US$7.91/barrel and a net increase of US$5.92/barrel for diesel during the same period.

The exchange rate of the Philippine Peso to US Dollar did not help lessen oil prices as the peso depreciated against the US dollar by Php2.42 also in the same period.

One of the formulas by the Department of Energy (DOE) assumes a Php1.00/liter change in domestic oil price for every US$3.00/barrel change in MOPS.

IBON however observed that applying this formula does not reflect the steep hike in oil prices.

Moreover, according to IBON’s executive director Sonny Africa, TRAIN’s new and higher taxes aggravate and intensify the impact of these oil price hikes.

The TRAIN law adds new excise taxes on diesel and kerosene and raises excise taxes on gasoline.

TRAIN imposes a new Php2.50 liter excise tax on diesel and Php3.00 per liter on kerosene, while increasing that on gasoline by Php1.65-2.65 to Php7.00.

The final taxes imposed are even higher because the 12% VAT is also applied to them.

Thus, of the net increase in the prices of diesel, kerosene, and gasoline, TRAIN has added Php2.80, Php3.36, and Php1.85/2.97 to the price of every liter, respectively.

This means that TRAIN’s taxes accounted for one-fourth of the increase in the prices of diesel and gasoline.

TRAIN keeps increasing the excise tax on oil products and by 2020 they will have permanently added Php6.72/liter to the price of diesel, Php5.60/liter to the price of kerosene, and as much as Php6.33/liter to the price of gasoline.

“Real wages are stagnant at very low levels and TRAIN’s new taxes and inflationary impact are an unnecessary additional burden on the majority of Filipinos who are low-income earners,” said Africa. # (Image from Philippine Gas Price Watch through IBON)

BAYAN MUNA HITS TRIPLE WHAMMY PRICE HIKES ON OIL, POWER, AND WATER

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BAYAN MUNA HITS TRIPLE WHAMMY PRICE HIKES ON OIL, POWER, AND WATER

Group says government policy of deregulation and privatization to blame, calls on Pres. Aquino to step in

Bayan Muna Rep. Neri Colmenares today hit the triple whammy of price hikes on oil, power and water saying that it is the government policy of deregulation, privatization and liberalization is the root cause of this price hikes.

“Take the case of oil firms, they are so fast to jack up oil prices but are so slow to roll back. Why should there be another big time oil price hike when oil companies have a buffer stock that was purchased when the price was lower? Worse oil prices are decreasing in the international market but it is increasing here,” said Senior Deputy Minority Leader Colmenares.

The progressive solon issued the statement as oil companies is again set to implement a big time oil price hike even as oil prices fell in Asian trading hours last week after the International Energy Agency (IEA) predicted that global oil prices will recover only partially over the next five years, analysts said.

News reports say that US benchmark West Texas Intermediate (WTI) for March delivery fell 68 cents to $52.18, while Brent crude for March eased 80 cents to $57.54 in morning trade.

“Besides the rollbacks they implemented then was not even right because some industry insiders are saying that it should be P1-2 more. Given this situation and government is also slow in lowering the prices of basic commodities services and transportation so it is the consumers are always at the losing end. This is the reason why the oil industry should be regulated to prevent this type of price manipulation and added burden to consumers,” said Rep. Colmenares.

WHERE IS THE COLLUSION REPORT ON OVERPRICING OF ELECTRICITY?

“Add to this the impending power rate hike and water rate hikes then consumers are again given another burden. As for the impending power rate hike, we have yet to get the full report of the Energy Regulatory Commission (ERC) on the collusion investigation of generation companies (gencos) which is long overdue but Meralco is again using the same reasoning of simultaneous plant outages as the reason for the increase. Again this would not have happened if government effectively regulates the power industry and if it owns a significant number of power plants to have a say in the market and so that consumers would be held hostage by power players,” he said.

WATER REFUND

“Meanwhile the looming water rate hike of Maynilad and the potential adjustment of Manila Water’s tariffs as a result of the International Chamber of Commerce (ICC) decision will come on top of another rate hike approved by the MWSS last December.

“Maynilad and Manila Water last month started implementing higher water rates to cover foreign currency differential adjustment (FCDA), which will be reflected on the customers’ bills this month. This would not have happened if the water industry was not privatized by government,” said Rep. Colmenares.

“Also in other businesses, they are the ones who absorb bad business decisions and business risks like the foreign currency differential adjustment (FCDA) and pay their own taxes but these water concessionaires are raking in billions by fooling us. They even pass to consumers losses due to changes in foreign exchange rates. But in this case, the concessionaires borrow from foreign creditors without any qualms knowing that they are insulated from the risk ordinary borrowers take because they’re allowed to pass on their forex losses to their consumers. It is like having their cake and eating it, too. Sa kuryente nga e nagrereklamo tayo sa paniningil sa atin ng systems loss pero dito mismong buwis na nga ng kinita nila ang sinisingil pa sa atin,” “This shows that privatization is wrong and the practice of automatic pass through of forex losses should not be allowed by government”, explained Rep. Colmenares.

“Manila Water and Maynilad must first refund billions of pesos it collected from the public for still unimplemented water projects before it could talk about increase water charges. Among these projects is the P5.4 billion Angat Water Reliability, and the P45.3 billion Laiban dam projects,” added the progressive solon.

“As it is, deregulation, privatization and liberalization have been proven to a bane to consumers and should be reversed. We should act now and Congress should fast track the measures to stop these destructive and lopsided economic measures before it wreaks more havoc on the lives of the Filipino people,” said Rep. Colmenares.

AQUINO CALLED TO STEP IN

“These impending rate increases could be stopped if Pres. Aquino will abandon his privatization and deregulation policies while at the same time intervene and warn these companies of their liabilities should they be involved in price manipulation or unjust rate increases. The fact that the Aquino administration has allowed prices of basic commodities to remain high despite the decreasing oil price only shows its lack of concern for consumers. In the end, the government is the one to blame for persisting in the discredited privatization and deregulation policies which allows these rate increases to the detriment of the public,” ended the Senior Deputy Minority Leader.###