Misinformed or incompetent?

For the Secretary of Energy to claim that the government has no authority to impose price caps — was she misquoted, misinformed, or is simply incompetent?

At first, Secretary Sharon Garin declared that the Department of Energy (DoE) had no power or authority to impose price caps outside of emergencies due to the deregulation of the oil industry.

She said this despite the existence of a legal precedent established by the late Energy Secretary Angelo Reyes in the aftermath of typhoons “Ondoy” and “Pepeng” where the Arroyo administration imposed price ceilings on fuel on the basis of Section 14(e) of the Oil Deregulation Law (RA 8479).

The constitutionality of the move was questioned by Pilipinas Shell Petroleum Corporation (PSPC) but it was upheld by the Supreme Court as constitutional and a valid exercise of authority by the government in times of emergency. (Mendoza v. PSPC, G.R. 209216, 21 February 2023.)

Back to the present, President Ferdinand Marcos Jr. recently declared a state of national energy emergency under Executive Order 110. Given the emergency declaration, Garin’s tune “evolved” from having “no authority” to it is “not inclined” to recommend the imposition of price caps for fear it would cause supply disruptions.

So far, all we have heard from the DoE are excuses for why it cannot do anything to stop prices from surging — now almost triple for diesel! Why the government claims it is helpless, or worse, seemingly held hostage to the threat of supply disruptions should it impose price caps is beyond comprehension.

More than disappointing, it is infuriating that since the energy crisis started (even before a crisis was declared), the measures and rather flimsy excuses put forth by the DoE have been more in favor of protecting the oil industry rather than giving relief to Filipino consumers. Even the proposed suspension of the excise tax does not guarantee that pump prices will decrease.

To suspend the excise tax without ensuring the amount would be reflected as a reduction at the pump would render the measure inutile, if not entirely stupid. Also, without disclosing how pump prices are computed, the considerable loss of income for the government will just fall into the abyss created by the Oil Deregulation Law and will translate into even more profits for the oil industry players — again at the expense of the already suffering consumers and the receding economy.

Instead of focusing on suspending the excise tax, the government should immediately impose a price cap on fuel stocks that have already been paid for and delivered before the Middle East war broke out. And if the justification for the market-driven price hikes is for the cost of replenishment, the government can look into subsidizing that portion of “increased cost to replenish.” This way, the government not only ensures a continuous supply but also stabilizes pump prices in lieu of an outright excise tax suspension.

While the government takes its sweet time “studying” options to stop further increases in pump prices and mitigate its impact on basic goods and services, it is the poor, working and struggling classes who have to suffer in silence with no hope or relief in sight.