Concepcion sees volatile oil prices till May, proposes energy-saving measures

Industrialist and consumer advocate Raul T. Concepcion urged consumers yesterday to support the government’s energy conservation efforts as oil prices are expected to remain volatile until May this year.

Concepcion, chairman of the Consumer and Oil Price Watch (COPW), said April and May are the most crucial months in view of the record-high oil prices and the passage of the value-added tax (VAT).

"Therefore, to reduce our energy consumption, we must do the following: shopping malls to close every Monday for two months; and factories to implement a four-day work week from Monday to Thursday, extending the working time to 12 hours, including a one-hour lunch break," he said.

Concepcion also underscored the need for the global community, particularly the industrialized countries of US, Europe and China, to reduce oil consumption by one to two percent. "If this is done, then prices of petroleum will taper off because supply will begin to exceed demand."

Concepcion said prices of diesel and gasoline are very volatile due to tight supply and low production capacity as evidenced by the increase in diesel price by $4.69 per barrel to $73.55 per barrel and the increase in gasoline by $4.11to $63.88 per barrel from March 31 to April 4th or in a span of just four days.

"The government has taken the initiative in calling an emergency meeting on energy conservation in Malacañang, chaired by Exec. Sec. Eduardo Ermita with DTI Secretary Juan Santos, DOE Secretary Raphael Lotilla and attended by 30 business organizations," he said.

He said the meeting stressed the need to conserve on fuel as oil prices have gone up by 60 percent, compounded by the increase in the raw material cost of the agricultural and manufacturing sectors by an average of 35 percent.

These, inturn, has put undue pressure on the dollar/foreign exchange reserves, most of which come from remittances of overseas Filipino workers (OFWs), that could trigger depreciation of the peso.

He said there could a be clamor for a wage increase if a transport fare hike is approved.

"Transport fares which will have to be increased will make the labor sector ask for a wage increase, which will have a domino effect on hauling and shipping charges resulting in the increase in the prices of basic commodities,"he said.

But he appealed to the labor sector to be more sensitive to the impact of a wage increase.

"Our appeal is for the labor sector to accept an increase in COLA (cost of living allowance) instead of a wage increase because of the difficult times the manufacturing sector is going through," the business leader said.

Concepcion said the passage of the VAT bill, on the other hand, signals that the government can put its fiscal house in order.

"There will be renewed foreign and local investor confidence, banks will be convinced to lower interest rates since the government will no longer be a credit risk," he said.

He added that the government must use the additional VAT revenues and the savings from lower interest payments to invest heavily in infrastructure projects to include schools, hospitals, and roads and bridges for the benefit of all, especially the poor.