Mitigate, mitigate! Amid rumors and fears of an absentee President at this crucial point in the economy, many sectors are crying out for swift and decisive action to cushion ordinary Filipinos from the impact of the oil crisis.
Yet two weeks after President Ferdinand Marcos Jr. declared a state of national energy emergency and took steps to repatriate some 3,800 overseas Filipino workers in conflict-affected nations in the Middle East, Filipinos back home have begun to feel the weight of rising costs in their daily lives. They are increasingly antsy. They are wondering how long the fuel prices will keep shocking them every waking day, and if these prices will ever slide back to “normal.”
It’s all very well that the President also signed into law Republic Act 12316, which authorizes the Chief Executive to “suspend or reduce the excise tax on petroleum products, amending for the purpose Section 148 of the National Internal Revenue Code of 1997, as amended.”
Scrapping the excise tax would drop fuel prices, but it is not as simple as that. The implementation of RA 12316 depends on certain conditions.
First, President Marcos can only exercise his emergency powers “when the one-month average Dubai crude oil hits or exceeds US$80 per barrel.” Also, scrapping the excise tax will only reduce the retail price of fuel (up to P10 per liter for gasoline and P6 for diesel) “for new inventory arriving after implementation.”
Reports say Dubai crude has not only hit $85, it has also surpassed it. It has soared to over $100 per barrel, sometimes hitting $120 due to the uncertainty in the Middle East. Because oil prices have surged radically, with no signs of stopping as of this writing, government and business leaders have been in recent talks to come up with solutions to these dire economic consequences of the war between the United States and Israel versus Iran.
And with the Strait of Hormuz open on Iran’s terms (including a toll of US$2 million per ship), will any “new inventory” be expected to arrive anytime soon? What can we do when supply does reach an unbearable limit?
An 8 April story from an Australian news site revealed that “ship traffic through the Strait of Hormuz had remained at an effective standstill in the 24 hours since Iran conditionally lifted its blockade on the critical shipping line.” From more than 130 vessels passing through per day before the war, it went down to an average of seven, the report said.
It has become volatile times for the world in one blink and no one seems able to ascertain an end to the conflict, even with the “fragile” two-week ceasefire reached just hours before the deadline US President Donald Trump gave to Iran.
Hereabouts, the Department of Agriculture raised the fact that the country stands to lose up to P75 billion in food production if the government fails to move. DA Undersecretary Asis Perez, in a press briefing, said the “cost of inaction” for rice, corn and fisheries could reach that amount unless subsidies amounting to P37 billion are released over three months to stabilize those sectors.
But government subsidies — like the oil supply that will take time to stabilize even if the war definitely ends — have limits, do they not? How long will the source of the government’s largesse last?
Perhaps the better question is: what can the government start to do to boost local production so that crises like this one do not punch us so hard in the gut? If this aspect has been neglected for far too long, now is still a good time as any to fix the situation.