Amid Oil Crisis: No Need for Emergency Powers Yet, DoE Says


But public warned to ‘expect the worst’

While oil prices in the international market are soaring and projected to hit US$200 per barrel before December, the Department of Energy (DoE) claimed that the situation is under control and there is no need—as of now—to give emergency powers to President Gloria Macapagal-Arroyo. However, Energy Secretary Angelo T. Reyes Jr., said that the country must expect the worst now that pump prices of gasoline and diesel have breached the level of P50 (US$1.124) per liter and transport groups are not totally abandoning their demand for a fare hike, despite the “withdrawal” of their petition to the Land Transportation Franchise and Regulatory Board (LTFRB).

BY NOEL SALES BARCELONA
Contributed To Bulatlat
Vol. VIII, No. 18, June 8-14, 2008

While oil prices in the international market are soaring and projected to hit US$200 per barrel before December, the Department of Energy (DoE) claimed that the situation is under control and there is no need—as of now—to give emergency powers to President Gloria Macapagal-Arroyo.

However, Energy Secretary Angelo T. Reyes Jr., said that the country must expect the worst now that pump prices of gasoline and diesel prices have breached the level of P50 (US$1.124) per liter and transport groups are not totally abandoning their demand for a fare hike despite the “withdrawal” of their petition to the Land Transportation Franchise and Regulatory Board (LTFRB).

In the weekly Kapihan sa Sulô in Quezon City, the energy chief said that they are still talking about short- and long-term solutions to the surge in oil prices.

Measures such as the promotion of the use of compact natural gas (CNG) and liquefied petroleum gas for public utility vehicles, tariff cuts on crude imports (which was done earlier) and the promotion of the use of biofuels in industries and transport, are more likely to be considered, he said.

“But for now, all we need to do is to conserve and cut down on our fuel consumption,” Reyes said, adding that it is not government’s sole responsibility to find solution to the crisis.

“Expect food prices to soar due to higher transport cost,” Reyes added.

On the issue of suspending the 12-percent value-added tax (VAT) on oil, Reyes explained that it is hard for the administration to do so for it is mandated by law. The law he was referring to is Republic Act No. 9337, more commonly known as the Restructured Value-Added Tax Law, which was passed in 2005.

“Unless we repeal or amend the law, then the suspension or the removal of VAT on oil can’t be imposed,” said Reyes.

Asked about the possible re-opening of the US$2.3-billion Bataan Nuclear Power Plant (BNPP), which was mothballed in 1987, Reyes replied that it is easier said than done.

Some groups are lobbying for the reopening of the controversial power plant but Reyes clarified that government needs at least US$800 million (P35.585 trillion) to rehabilitate the plant and the public must wait another five years before the BNPP can be fully operational.

On the other hand, independent think-tank IBON Foundation, Inc., said that it is the proper time for the government to take a stand and regulate the domestic prices of oil.

In the statement published in their official website (http://www.ibon.org/), the think tank stated that the recent pronouncements of the Big Three (Petron, Caltex and Shell) that they need to increase their prices by as much as P10 to P11 ($0.22 to $0.24) per liter highlight the urgency of reinstating regulation of the oil industry.

The government has lost its power to control prices of petrol in the local market after the Downstream Oil Industry Deregulation Law was implemented in 1998. Contributed to Bulatlat

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