Is it time for fuel pricing reforms? Proposals meet mixed reactions
MANILA, Philippines — Amid Middle East tensions driving uncertainty in global fuel markets, several sectors are calling for legislative reforms in oil pricing.
Senate President Francis Escudero is among those pushing for changes, proposing to give either the Department of Finance or the president standby authority to lower the value-added tax on petroleum products.
More extreme legislative solutions that were floated include the repeal of the Oil Deregulation Law.
However, the economic managers of President Ferdinand Marcos Jr. appear to take caution when it comes to such reforms.
Department of Finance Assistant Secretary Karlo Adriano said that Escudero’s proposal is still being studied by the agency.
When the Israel-Iran conflict threatened to drastically increase oil prices, Marcos himself said to prepare the government’s fuel subsidy program. As stated in the law, the fuel subsidy mechanisms will only be triggered once the oil hits $80 per barrel, which it nearly did.
However, the announced ceasefire was able to bring fuel prices back down, putting a pause on the release of fuel subsidies,
“What we feared initially as a sharp increase in oil prices did not happen, because we saw how the world prices eventually sharply declined,” Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan said in a press briefing.
Meanwhile, Budget Secretary Amenah Pangandaman said there is still around P300 billion available for fuel subsidy in the national budget.
Asked if the economic team would propose legislative reforms such as repealing the Oil Deregulation Law, Special Assistant to the President for Investment and Economic Affairs Frederick Go said that while the government has been preparing for rising fuel prices, the matter had already been settled.
Go said the economic team had other tools in their arsenal to address external shocks, including fuel subsidies.
However, he added that they were not closing the door on the possibility should the need arise.
“If and when something happens and the facts are there, I'm sure that the economic team can review the circumstances that [are] surrounding the event, and can make the necessary adjustments to mitigate those shocks,” he said.
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