By MYRNA M. VELASCO
With pump prices still trailing uphill climbs and industry players already feeling the pinch of not fully reflecting their actual costs, the Department of Energy (DoE) is being asked to already abandon its policy of constantly prodding the oil companies to extend subsidies to public transport groups.
The oil firms noted that what the energy department has been failing to realize is that the discounts it is constantly seeking has been pushing some of the industry players, especially the hapless dealers and retailers, into deeper financial predicaments.
In fact, even the International Energy Agency (IEA) already called on some countries, the likes of Thailand and Indonesia, to already veer away from heavily subsidizing their oil sectors, because this would eventually impinge on the economic fundamentals.
In the domestic market, indications have already been set that pump prices may go up again by
P0.75 to P1.00 per liter within the month; still due to historic increase in world oil prices.
With this, energy officials are again seeking for the expansion of discounts in diesel for the so-called "jeepney lanes" in desperate attempt to forestall fare hikes; but oil companies are already sounding off their burden on this.
To illustrate, it was noted that if the discount for jeepneys would be at
P1.00 per liter, a portion of that reaching up to P0.25 per liter, would have to be shouldered by the retailer.
Assuming that a retailer’s monthly volume for diesel would be 200,000 liters; and a significant chunk of that is procured by public transport, it is seen that a particular gasoline station would be foregoing significant revenues; and what is even more spiteful is the fact that they are not even posting reasonable margins because the industry is being impeded from reflecting true pump costs, under the guise of considering "public interest".
In view of recent market developments, the DoE is instead prodded to reconsider its earlier decision to hike import duties by 2.0 percent to 5.0 percent effective last January.
This was meant to raise more than
P5.0 billion additional revenues for the national coffers, but to the detriment of the consumers who are all bound to absorb these costs, since these are "pass on" in nature.
"Instead of passing on to the industry the burden of subsidizing the price of petroleum products, it (DoE) should seriously consider removing the 2.0-percent additional levy," oil industry players said.
It would be recalled that the higher levy was decided to be imposed when there was a slight softening of prices between the months of November to January; but the government, it seems is bent on making this as a permanent burden for consumers, even if historic upticks in prices have already been swamping oil markets.
Based on estimates, it was shown that the scrapping of the 2.0-percent levy, for gasoline alone, would mean a reduction of
P0.40 per liter; and for diesel, it would be P0.50 per liter.
"The government, and more importantly, the DoE should realize that if it continues to rely on the oil industry to subsidize what the government wants, pretty soon the industry will be decimated because of the substantial losses the oil companies are currently incurring," the stressed. (MMV)
