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Oil breaches $85, law changes sought

That’s why we asked Congress to amend the oil deregulation law to give DoE the power to intervene in situations like this

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As crude oil prices hit new multi-year highs yesterday, the Department of Energy (DoE) said Congress should move to amend the oil deregulation law to reinstitute safeguards against sudden market spikes.

Cost of the fuel topped $85 a barrel for the first time in seven years in the United States.

EU energy ministers also held an emergency meeting on how to tackle surging gas prices, with 11 countries including Germany rejecting proposals from France and Spain for deep market reforms.

Europe, highly dependent on imported gas and oil, is seeing wholesale energy prices jump dramatically, mainly on the back of soaring spot gas prices that are the benchmark.

Trigger lapsed
Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the government can suspend the collection of excise tax if prices of oil in the world market consistently goes beyond $80 per barrel for a certain period.

Energy Secretary Al Cusi, however, said that the trigger mechanism had expired.

“That’s why we asked Congress to amend the oil deregulation law to give DoE the power to intervene in situations like this,” Cusi said.

Cusi wrote Congress to amend the law which Pampanga Rep. Juan Miguel Macapagal Arroyo, chair of the House Committee on Energy, has acceded to.

“I have long pushed for a special mechanism to prevent overpricing in emergency situations. The Oil Deregulation Law does not give oil companies blanket authority to take advantage of consumers,” Arroyo said.

“The price crunch is affecting all of us and I hope supply, through increased production of the Organization of the Petroleum Exporting Countries will surpass demand for prices to taper down,” Cusi said.

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