An immediate release of government assistance to public utility vehicles will be achieved by shortening the trigger period from three months to one and simplifying the requirements, the Department of Energy said yesterday.

The proposal, nonetheless, may need the amendment of the law for releasing fuel subsidies to the transport sector.

In a press briefing, Energy Secretary Raphael Lotilla said this was one of President Ferdinand "Bongbong" Marcos Jr.'s proposed solutions to the oil price shock that is expected to worsen amid the spreading Middle East conflict.

$80 per barrel long breached

Under the current law, fuel subsidies are released to the transport sector whenever the Dubai crude oil price exceeds $80 per barrel for three consecutive months.

Lotilla said shortening the trigger period will allow the government to release the subsidies faster to the transport sector, one of the sectors most affected by rising fuel prices.

"With this simplification or shortening of the period, we will be able to release the subsidies in a shorter period," Lotilla said.

"Since Congress is now considering the General Appropriations Act, it will be included in that process. The amendment will take effect in 2024 immediately upon Congress's approval of the GAA," he added.

The DoE chief also said the government will simplify the requirements for the release of the fuel subsidies.

The release of the subsidies requires the approval of the DoE, the Department of Transportation, and the Department of Budget and Management.

Lotilla said that under the new proposal, the release of the subsidies will only require the approval of the DBM, DoTr and the DoE.

He said the DoTr will finalize the list of beneficiaries for those with franchises, the Department of the Interior and Local Government for tricycle drivers, and the Department of Trade and Industry for delivery service drivers.

Even though there's an effort to expedite assistance, Lotilla said the fuel subsidy in the 2024 national budget was decreased to P2.5 billion from P3 billion this year.

The energy chief, however, believes that even with the reduced budget, the required funding will be met.

"That's based on the experience of the previous year. We don't know what will be the final amount," the official said.

Other measures on table

Lotilla added the government will implement a voluntary 20-percent ethanol blend for gasoline, which is targeted for approval by the end of 2023.

He said the ethanol blend will help mitigate the rising fuel prices, as ethanol is cheaper than gasoline.

Lotilla said the President also instructed him to continue the transport sector's electrification, particularly for mass transport and light cargo vehicles.

He said the government will put in place charging stations and ensure that the benefits to the transport sector, particularly the drivers, will be there.

Lotilla said the President also emphasized the need to prepare the economy for the eventual manufacture of electric vehicles and to link this with the local mining sector that will produce the minerals needed to manufacture batteries and other components of electric vehicles.

Rules out soon

The DoE is also releasing the guidelines for the implementation of the long-delayed higher biofuels blend before the year ends.

Lotilla said the current 10-percent ethanol blend, also known as E10, in gasoline would be increased to 20 percent or E20, although it would be a voluntary option for motorists.

Lotilla added that the current two percent or B2 coco methyl ester or CME blend on diesel will be adjusted to three percent or B3.

Based on the DoE calculation, implementing the E20 blend could slash gasoline prices by around P1.28 to P1.50 per liter.

While ethanol is generally cheaper than gasoline, Lotilla noted that local ethanol at P79.49 a liter is still more expensive than the imported supply at P41.84 per liter.

Lotilla said DoE will bank on the coconut industry, whose production reaches up to 15 billion nuts annually, to complement the B3 shift.

"An additional 1 percent blend only needs 2.6 billion nuts. The increase in the blend can also drive down the cost of CME because there will be a bigger market for it. Right now, we expect pure diesel to be at parity with the per liter price of CME," Lotilla explained.                               

With Maria Romero