Oil deregulation law suspension proposed

Organized labor pressed yesterday for the suspension of the oil price deregulation law to prevent the further rise in the prices of petroleum products and other essential commodities.

The Trade Union Congress of the Philippines (TUCP), the country’s largest labor union, expressed alarm over the rising prices of petroleum products. The latest round of oil price hikes, announced last Sunday, was the sixth or seventh this year.

"Congress should suspend the oil deregulation law and replace it with a more socially responsive measure," the TUCP said in a statement.

TUCP spokesman Alex Aguilar said the government should take immediate steps to curb the rising prices of oil and protect Filipinos, particularly workers, from a possible national emergency.

"It is always the consumers, especially the poor, who suffer in this bitter chain of events. We propose that government take bold steps to prevent oil companies from making the lives of Filipinos worse," he said.

Aguilar said the government must formulate long-term programs to ease the country’s demand for oil products and harness alternative sources of energy.

Meanwhile, the militant group Kilusang Mayo Uno (KMU) called for the immediate resignation of Energy Secretary Vicente Perez for his failure to stop the increase in the prices of gasoline. "It is very obvious that Perez is favoring the big oil companies over poor Filipinos, particularly the workers," KMU president Elmer Labog said.

Last Thursday, Perez assured the public that while oil prices may be soaring, there is no oil crisis since the country has an adequate supply of petroleum products.

However, he said consumers will have to bear the brunt of a continuing increase in the prices of gasoline due to the "historic highs" in the price of world crude.

Perez also said President Arroyo will soon unwrap her energy independence and savings package of administrative and legislative measures she promised during her state of the nation address on July 26.

The President, according to Perez, is determined to revive the "development of our very own indigenous energy sources" such as "oil, natural gas, geothermal (energy), coal or renewable energies such as wind and solar" energy.

He pointed out that despite the recent round of fuel price hikes, fuel prices in the Philippines — particularly for diesel and gasoline — are much lower than those in neighboring Asian countries because of the deregulation of the oil industry and the fact that "we have one of the lowest excise taxes on petroleum among oil-importing nations in Asia."

However, Perez also confirmed earlier that the President signed a "midnight" executive order (EO) raising the levy on imported crude oil to five percent from the current rate of three percent.

The EO was signed last July 23, two days before the 13th Congress started its first regular session. The Constitution provides that the President can exercise legislative powers to raise taxes while Congress is not in session.

Perez clarified that while Mrs. Arroyo has signed the EO, the higher tariff on imported crude oil products will not result in any increase in the pump prices of gasoline and other refined petroleum products.

"We won’t implement it yet until we’re sure that the world prices of crude oil would go down. The higher tariff would take effect at the same time (as) the rollback in crude oil prices in the world market to offset any increase in the pump prices of gasoline," he said.

Perez said this higher tariff will mean an additional P4.4 billion in revenues to help narrow down this year’s budget deficit, with its ceiling set at P197 billion.

He said this EO will remain in effect until Congress can pass into law the President’s proposed bill increasing the tariff on imported crude oil products — one of the eight tax reform bills she mentioned in her address.

The Department of Energy is optimistic that oil prices in the global market will soften after the Organization of Petroleum Exporting Countries (OPEC) decided to increase its production by two million barrels in July and 2.5 million this month.