P2.5B in fuel subsidies for PUV drivers, ride-hailing car operators underway: DOTr

Fuel subsidies amounting to P2.5 billion for drivers and operators of public utility vehicles (PUV), including ride-hailing cars and tricycles, are already underway, the Department of Transportation announced Wednesday. 

The aid will temporarily cushion the inflationary impacts of the persistently rising fuel costs arising from the escalating tensions in the Middle East, specifically for transport sector workers heavily affected by the big-time hike. 

According to DOTr Legal Service official Noel Alarcon, the release of the funds is now pending in the Department of Budget and Management, which had already reached the final stage of preparing the necessary documentation for the issuance of fuel subsidies last week.

Alarcon attributed the delay to the pending certification from the Department of Energy (DOE) confirming that Dubai crude oil prices had reached $80 per barrel, which is required to trigger the disbursement.

“The DOE already issued the certification, and so we can immediately release the P2.5 billion for our drivers and operators once the DBM rolls out the budget to us, Mr. Chair,” Alarcon told the Senate committee on public service. 

The amount will cover subsidies for drivers and operators of modern and traditional jeepneys (233,314), tricycles (195,018), and delivery riders (723,000). This also includes transport network vehicle services or drivers of ride-hailing apps.

Panel chair Raffy Tulfo proposed that the DOE expand the installation of electric vehicle (EV) charging stations to reduce reliance on petroleum amid the skyrocketing prices.

DOE Legal Service Official Dexter Suyat said the agency has actively pushed for the expansion of EV charging stations in hospitals aside from malls, since the EVIDA Law took effect in 2022. 

Suyat added that the DOE also issued a circular mandating the distribution utilities to include EV charging stations in their development plans. Close coordination with gasoline stations to dedicate a space for EV charging stations is also ongoing. 

“Those initiatives have been ongoing and we ramped it up given the crisis now, Mr. Chair,” Suyat told the committee. 

Transport groups lamented that subsidies alone are not enough to keep their operations, unless the excise tax and value-added tax are suspended ahead of the expected spates of big-time oil price spikes.

Meanwhile, Senate energy committee vice chair Win Gatchalian urged the government to fast-track the transition of PUVs to EVs through the PUV modernization program to cut dependence on oil and safeguard the transport sector from sudden global oil shocks.

According to the senator, one of the principal authors of the EVIDA law, PUV drivers and operators of EVs are essentially insulated from oil price volatilities, and enjoy an excise tax exemption, significantly lowering purchase costs compared with internal combustion vehicles. 

Furthermore, Gatchalian added that EVs’ resilience to fuel price fluctuations could protect commuters from fare hikes. 

Meanwhile, Senator Chiz Escudero filed Senate Bill 1993 on Wednesday to establish a government-owned crude oil tank storage to ensure fuel security and prevent extreme price spikes in times of crisis. 

He argued that since the Philippines imports about 90 to 95 percent of its oil supplies from the Middle East, the country is highly vulnerable to external price shocks.

The bill proposed to build a crude oil tank farm capable of storing 90 days’ worth of national consumption (estimated at P30 billion) up to 180 days (P60 billion). 

Energy Secretary Sharon Garin recently said that the current inventory would only last until the end of April, and orders for May delivery are still being worked out.

The bill allocates an initial funding of P60 billion for the construction of the fuel reserves facility.