Regain state control on oil, think tank urges

Regain state control on oil, think tank urges | Daily Tribune

In a statement, Ibon said the Marcos administration’s continued adherence to deregulation contrasts with other Southeast Asian governments, which have used stronger state intervention to shield their populations from rising global oil prices.

“The government should be able to control local oil prices and should not have to pass the burden of rising global prices on to consumers,” the group said, citing Vietnam, Thailand, Malaysia and Indonesia as proof that state intervention can work.

Local pump prices posted sharp increases for the week of 22 to 28 September, with diesel rising by P8.82 to P106.37 per liter, kerosene climbing P6.47 to P130.97, and gasoline up P4.88 to P94.11. These followed three rounds of hikes this month, bringing cumulative increases to P18.31 per liter for diesel, P16.67 for kerosene, and P15.25 for gasoline.

The Department of Energy (DoE) reported that Dubai crude averaged $99.41 per barrel from 13 August to 11 September, above the $80 threshold set under Republic Act 12316, which allows for the possible suspension or reduction of the fuel excise tax.

Ibon pointed to Vietnam, which caps pump prices and draws on a Price Stabilization Fund adopted from the Oil Price Stabilization Fund (OPSF) the Philippines implemented during the oil price crunch in the 70s to 80s.

As of 17 September, Vietnam’s E10 RON95 gasoline was capped at 25,636 Vietnamese dong (VND) (P61.65) per liter and diesel at 29,945 VND (P72) per liter, with the fund shaving off 1,250 VND (P3.01) per liter for biofuel and 2,000 VND (P4.81) per liter for diesel.

State-owned PetroVietnam controls the entire oil and gas value chain, which the group said lets Hanoi set maximum retail prices and tap the fund when needed.

Thailand, which likewise runs a state-backed oil industry, relies on its Oil Fuel Fund and a refinery discount to keep prices down. Diesel there stood at around 40.69 baht (P76.74) per liter on September 18, supported by an 8.62-baht (P16.26) subsidy and a 4-baht (P7.54) discount.

PTT, the country’s national integrated oil and gas company, has the Ministry of Finance as a controlling shareholder.

In Malaysia, subsidized prices are kept fixed for eligible consumers. For the week of 17 to 23 September, BUDI95 RON95 gasoline remained at Malaysian ringgit (RM)1.99 (P30.59) per liter, backed by a RM2.38 (P36.59) per liter subsidy, while diesel stayed at RM2.10 (P32.29) per liter with a RM3.17 (P47.75) per liter subsidy.

State-owned Petronas manages most of the country’s upstream rights and a significant portion of its oil and gas value chain.

Subsidy, a regional standard

Indonesia, meanwhile, continues to subsidize fuel through December 2026, with Pertalite priced at rupiah (Rp)10,000 (P35.10) per liter and Biosolar at Rp6,800 (P23.87) per liter.

Subsidy outlays there have already surged to Rp331.4 trillion (P1.163 trillion) as of the end of August. State-run Pertamina plays a central role in implementing the subsidies and controls much of the country’s fuel supply chain and strategic assets.

Ibon said these interventions carry fiscal costs but show that governments can control fuel prices and protect consumers from price shocks, a course the Philippines has largely avoided.

The country instead continues to operate under Republic Act 8479, or the Downstream Oil Industry Deregulation Act of 1998, which stripped government control over fuel pricing and gave oil companies free rein to set prices on their own.

Ibon noted that despite declaring a national energy emergency earlier this year, the Marcos administration has not used that authority to compel oil companies to adopt transparent, justifiable pricing and has instead allowed the recent unabated hikes to continue. The group also said the Department of Energy has twice denied its requests to be shown the agency’s methodology for assessing fuel pricing.