Gov’t can’t stop oil firms from junking discounts for PUVs

Government can only persuade but not stop Pilipinas Shell, Eastern Petroleum and other participating gasoline station owners in their planned withdrawal of discounted diesel prices for public utility vehicles (PUVs) since this was a "voluntary" program they agreed to upon an appeal of President Arroyo.

Energy Secretary Vincent S. Perez admitted this to Palace reporters yesterday after he led the working luncheon meeting with President Arroyo along with his fellow ASEAN Energy Ministers at Malacañang.

Pilipinas Shell, Eastern Petroleum and Seaoil announced last week that they would scrap the discount to PUVs when the transport fare increase granted by the government takes effect next week.

"I think discount diesel is a voluntary program by private oil companies. We hope they will continue, but again it’s a free market," Perez pointed out.

"It’s the oil companies that initiated that (discounted diesel prices). So we leave it up to them to decide whether they will continue with it or not," Perez said.

The energy chief referred to this temporary relief measure worked out by the government with private gasoline station owners last year to offer a discount on diesel prices to jeepneys and buses to avert a transportation strike over the continued rise in gasoline prices while the Land Transportations Franchising and Regulatory Board (LTFRB) had not acted on their pending fare hike petitions.

The LTFRB approved last month a P1.50 fare hike for PUJs and P2 for PUBs to take effect next Monday.

As a "positive sign," however, Perez said the representatives from Indonesian informed President Arroyo during the luncheon meeting that the Organization of Petroleum Exporting Countries (OPEC) oil ministers had agreed to increase their production by two million barrels per day.

"We got a report from Indonesia today on behalf of OPEC and we’re very glad that OPEC, in the last extraordinary meeting that they had, listened to the call of consuming countries that we should have a more stable price of oil," Perez said.

Perez was referring to the last OPEC meeting held in Amsterdam where he was dispatched by President Arroyo to implore upon the oil cartel to raise output to stabilize crude oil prices.

"But I think, at least the positive signs over the last few days is that prices are easing since the OPEC (meeting) and I think it’s too early to say, three days doesn’t make a long term trend but we’re pleased that prices have started to ease," Perez pointed out.

At the same luncheon meeting at the Palace yesterday, President Arroyo discussed with the Asean energy ministers and representatives from China, Japan and South Korea the use of "alternative fuels" to reduce reliance on crude oil.

Perez said the Philippines still has the "lowest" price of gasoline and diesel even without government subsidy.