Crisis at autopilot

Crisis at autopilot | Daily Tribune

Diesel prices rose P18.31 per liter over the three weeks to 22 September, and gasoline by P15.25.

On 29 September, diesel fell about P60 and kerosene around P5.90, but gasoline barely moved, so whatever relief came was partial, uneven, and gone before most households could feel it.

The benchmark Brent is trading at $102 to $103 per barrel, up more than 11 percent from a month earlier, which suggests the next price adjustment is more likely to hurt than help.

The weak peso makes matters worse. It closed at a record P62.86 on 14 September and has since settled at P62.52.

Oil is bought in dollars, thus every centavo the peso loses is added to the pump price.

Meanwhile, the central bank has kept its policy rate at 5 percent, although August inflation stood at 6.1 percent, or a real rate of minus 1.1 percentage points, which means savers lose ground and the peso gets little support.

The BSP itself expects September inflation of 6.4 to 7.4 percent, so the gap will likely widen before it narrows.

A government that says the country is in an emergency should not have policies that don’t match what it’s saying.

The proposal to suspend the excise tax on most fuel has become a perfunctory reduction in kerosene and liquefied petroleum gas.

The jeepney driver, the tricycle operator, and the delivery rider pay for fuel first, and then the public pays again when fares, rice and vegetables go up.

The excise tax is a charge on a price that is already too high, and suspending it, even for a few months, is one of the few levers the government fully controls.

It does not depend on Brent, on the Federal Reserve, or on the goodwill of any foreign supplier. The situation becomes harder as China prepares to suspend its fuel exports.

Even if the country does not directly import fuel from the Asian giant, Filipinos will still feel the effects on supply and prices.

Officials will say that revenue would suffer, and that is true. But a government that collects more with every peso of price increase, since a value-added tax is charged on the higher price, is profiting from the very hardship it says it is fighting.

If the state can afford to wait while families have to borrow to buy diesel, it can afford to give up some of the take. The cost of doing nothing is also real, though it does not appear in the budget, because it shows up in missed meals, skipped school days, and small businesses that close for good.

An emergency declaration is supposed to mean faster decisions, yet none of the tools that usually come with it have been used in a way the public can see.

There is no clear timetable for easing the tax, no announced fare support for public transport that would help drivers and commuters at once, no target for fuel subsidies aimed at the poorest, and no plain report on how much supply the country holds or where more can be bought.

Price monitoring and warnings against profiteering have little effect because a warning does not lower a price.

When leaders declare an emergency, they borrow the public’s trust, which accepts extra powers on the understanding that they will be properly used.

If the powers sit idle while prices climb, the public learns that the word “emergency” is only an excuse for leaders to look good while creating space for extraordinary authority.

What the country needs now is not another promise but a decision — announced with dates and numbers — so people can plan their lives around it.

Suspend the excise tax, and make the central bank and the economic team speak with one voice on the peso and prices.

Every week of delay costs the poor more than it costs those who make the decisions and who see missed opportunities to raise slush funds for the coming national elections.