The Philippines: Review of oil deregulation law sought

  • PHILIPPINE President Rodrigo R. Duterte on 2 Mar 22 urged Congress to review the country’s oil deregulation law in order to give the government the power to intervene in the event of a spike in oil prices.
  • The statement was released after Mr. Duterte met with several Cabinet members and top security officials on 2 Mar 22 to discuss the political and economic impact of the ongoing Russia-Ukraine conflict. Republic Act No. 8479, also known as the Downstream Oil Industry Deregulation Act of 1998, removed government control on the pricing, exportation, and importation of petroleum products, allowing market forces to dictate oil prices.
  • Malacañang did not say if it will call for a special session to tackle the amendments to the oil deregulation law. Congress is currently on a break for the 9 May 22 elections.
  • House Ways and Means Chair and Albay Rep. Jose Maria Clemente S. Salceda proposed four amendments to the oil deregulation law, including the creation of a strategic petroleum reserve “during periods of abnormally low prices.”
  • “This would help ensure adequate supply at affordable domestic prices during periods of high world market prices,” he said in a statement.
  • Mr. Salceda said the law should also require the unbundling of retail prices of fuel, and improve price transparency. He proposed requiring all fuel retailers to update any change in retail prices in a central government database for efficient monitoring.
  • Energy Undersecretary Gerardo D. Erguiza said the DoE wants the law to be amended to include a provision that excise tax on oil should be automatically suspended if crude oil hits $80 per barrel for three consecutive months.
  • Meanwhile, Mr. Duterte also approved the release of PHP3bn for fuel subsidies and discounts to support public utility vehicle (PUV) drivers and agricultural workers hurting from the recent surge in pump prices.
  • This consists of PHP2.5bn Pantawid Pasada, and PHP500mn fuel discount program for farmers and fisherfolk. Economic managers earlier said the Pantawid Pasada program will give fuel vouchers to over 377,000 qualified PUV drivers.
  • The government is still cool to proposals to cut or suspend the excise tax on oil products as a form of relief for consumers. Each PUV driver will get an average of PHP6,500 under Pantawid Pasada, Land Transportation Franchising and Regulatory Board – NCR Regional Director Zona Tamayo said during the Laging Handa briefing.
  • Also, Mr. Nograles said the Agriculture department will provide fuel discount vouchers to farmers and fisherfolk to help them cope with rising fuel and production costs.

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