EDITORIAL — Outside the ayuda safety net

With the prospect of US President Donald Trump getting mired in a “forever war” with Iran, fuel prices are surging again.

Industry watchers are projecting increases next week ranging from P9.50 to P10.50 per liter for diesel, the fuel of most public utility vehicles, and from P3.50 to P4.50 per liter for gasoline.

Before renewed armed conflict in the Middle East triggered a fresh spike in global crude oil prices, prices of kerosene and liquefied petroleum gas also went up beginning July 13 after the government restored the excise tax of P5.60 per liter on kerosene and P3.36 per kilogram for LPG.

Crude oil prices have again jumped as the US bombed targets in Iran, which retaliated through strikes on US military installations in the Gulf states.

The prospect of a prolonged war should remind the Marcos administration of its promise to suspend or reduce fuel taxes to ease price pressure at the pumps. Congress passed with impressive speed a law granting President Marcos special powers to do this.

Except for LPG and kerosene, however, the promise was forgotten as the government opted to collect its massive windfall from higher excise and value-added taxes from the increased pump prices.

Instead the government opted for its usual remedy for every problem: tax-funded ayuda for targeted sectors. The expected result was accelerated inflation, as higher fuel and logistics costs were passed on to consumers by those not benefiting from any form of state assistance.

Data later showed that with galloping commodity prices, consumption and economic activities such as leisure travel slowed down.

Even the ayuda failed to appease public discontent, as the distribution was marred by inefficiency. A tricycle driver died apparently of heat stroke after waiting for the aid in a long line in the scorching summer heat, without shade or seats provided.

This time, the government is rolling out P7.2 billion to provide ayuda to poor and low-income families. But these aren’t the only sectors needing relief from soaring fuel prices. Businessmen who provide goods and services have called for tax suspensions or a permanent reduction of the 12 percent value-added tax on fuel, to ease logistics costs and temper inflation.

Apart from inflation, workers in Metro Manila must brace for possible layoffs as businessmen cope with the highest-ever wage hike of P85 that takes effect later this month, which the populist Labor Secretary Francis Tolentino approved, ignoring opposition from those who would shoulder the payment burden.

While any assistance is welcome, ayuda can barely cover the increase in the prices of nearly everything. The government must revisit its unfulfilled promise of a fuel tax break as the Middle East crisis drags on.