We've already written that the economy of the world is largely dependent on man's lust for oil. When oil was discovered, it changed many things in this world. In America where oil was first discovered, its major use was to light up the streetlamps. Eventually with the invention of the motorcar that runs on fuel extracted from oil, suddenly transportation exploded into what we now know as mass transportation with cars, buses, ships, and planes all operating on fuel oil. That Japan attacked the US in Pearl Harbor was due to America's embargo against the Japanese on the use of oil.
In 1973, the Arabs nationalized the oil companies and all of a sudden from centavos per liter, fuel prices shot up to pesos per liter. But America was smart enough to counter the Arab control of oil by buying more oil from the Arabs who in turn asked the Texas oilmen who were experts in drilling oilfields to add more refineries. So America bought their oil at the new prices, but dumped it inside America's huge caverns, literally transferring oil from the Middle East to the deserts of America…a very smart move.
So the Arabs set up the Organization of Oil Exporting Countries which soon became known as the Oil Cartel, where OPEC members, led by Saudi Arabia would meet annually with all its members to control the production of oil, where they could cause the rise and fall of world prices of crude. Somehow due to the discovery of shale oil in Canada and in other parts of the world, plus the fact that the automotive industry has began creating cars that run on less fuel or not fuel at all, the pump prices of oil has peaked at P56/liter here in the Philippines or US100 per barrel.
To the poor fishermen of Cebu or Bohol whom I have met, their lives are dependent largely on the prices of oil products because their pump boats run on fuel. So technically when fuel prices shoot up, the prices of fish in the market also go up. The same is true to jeepney fares -- passengers have to pay more to take a ride to school or work. For much of the last two decades, we witnessed many jeepney strikes that more often than not crippled our economy until of course the City of Cebu got those Kaohsiung buses, which rendered the strikes by militant jeepney drivers inutile.
But by and large, the world economy is still based on world crude prices. So here's the rub. For this year alone, the pump prices of fuel oil have gone down seven times this year and given what we already said earlier, the law of supply and demand should come into play. So what's happening here?
Meaning if oil prices are up, the jeepney fares or fish prices also shoot up and this has been happening to us in the last two decades. But now that pump prices are down, why is it that jeepney fares aren't going down or the prices of fish still high? What about the prices of power? Our power plants are also dependent on the prices of oil, so why haven't our power rates gone down? Will someone in the Cebu City Council question this?
There can be one explanation: government agencies such as the Land Transportation Franchising and Regulatory Board and the Department of Trade and Industry have totally forgotten that they serve the public whose taxes pay their salaries. The reason why the LTFRB or the DTI was created was to ensure that public interest was protected. So who's doing all that protecting?
This is why I'm glad that former Councilor Augustus "Jun" Pe, Jr. filed that petition to the LTFRB to reduce jeepney fares. Sure, Jun Pe may be accused of using this issue to get his name back in the headlines so that the public would remember him in the next elections. But I don't blame him if the officers of the LTFRB or DTI are sleeping on the job.
When I was CITOM chief, I met the top officials of the LTFRB during that time and I gave them a formula that would allow the automatic increase in fares if and when oil prices go up and consequently there is an automatic reduction in those fares when oil prices go down. But those LTFRB bureaucrats in Manila did not understand my formula for lack of brains! Meanwhile the Energy Regulatory Commission supposedly has a similar automatic formula in adjusting power rates to go up or down. So why isn't the LTFRB following this formula? As for the ERC, why haven't power rates gone down? Are these officials all sleeping on the job?
Finally with oil prices doing down, why don't you ask yourself what ever happened to those militant or leftist organizations that marched the streets demanding the repeal of the Oil Deregulation Law and in its place the Oil Price Stabilization Law? Of course, the leaders of those Leftist organizations allied to the Communist Party of the Philippines hate the Oil Deregulation Law want to destabilize the nation, which the ODL has really stabilized. Today thanks to the ODL it is the market forces that determine fuel prices, not the Office of the President like in the old days.