SEN. Sherwin Gatchalian, chairman of the Senate Committee on Energy, sees dark clouds ahead for the oil industry, as well as the transport sector.
“It seems to me that the situation is quite dire,” Gatchalian said in TV interview on Wednesday, adding: “I was just talking to the transport sector yesterday at UE and some industry players, and they are saying in a common direction that this elevated price of oil will be protracted.”
Gachalian took it to mean that the crisis from spiking oil prices will last until probably “end of the year” even as he had also earlier “heard from the CEO of Exxon Mobil” that it is looking at the next five years.
He continued: “So, whether it’s at the end of the year or next five years, we are seeing a $120 per barrel, elevated prices in the medium term,” adding that “we have to be prepared to shield our transport sector from this elevated pricing.”
In an ANC Dateline Philippines inteview with Karmina Constantino, the senator, however hastened to clarify that, “I understand that we cannot raise fares right away because it’s a balancing act,” weighing both the need to ease the impact of inflation and consumer capability in paying transport fares.
“So, in the meantime that we are shielding the consumer, government has to step in and increase subsidies through Pantawid Pasada in the next six months,” the senator added.
Asked how sustainable would that be after six months, Gatchalian replied: “well, for now, it’s still cheaper than suspending excise tax on fuel,” noting that “If you suspend excise tax on fuel, the government will stand to lose about P150 billion in the next six months.’
“My proposal is to give at least P3,000 aid a month for our public utility drivers in the next five months,” the senator suggested. “That will cost approximately about P4 billion. So it’s still quite cheaper compared to suspending excise tax on fuel.”
He, however, clarified that the P3,000 per month is only to “cover the [drivers’] expenses and their take-home pay at this level of 80 pesos per liter of gasoline and diesel,” noting that “they are taking home zero, they’re not taking home anything. So the P3,000 is just to cover their take home pay at P3,000.”
The subsidies were intended to “encourage our drivers to go back and drive. At least if they are on the road, they will earn something as opposed to just being jobless. So, the P3,000 is to hit on the drivers and encourage them to go on the streets and continue their work.”
When drivers stop plying the roads, he explained, “we will be under capacity in terms of our transportation needs. Especially during rush hours. Right now a lot of our commuters are feeling inconvenienced because they’re lining up longer, it’s taking time for them to find public transportation. So we have to also balance supply and demand in terms of capacities and encouraging them to go on the street is actually one way of finding that supply and demand equilibrium in terms of capacities.”
The senator stressed, “everything is intertwined. And we’re managing inflation, fighting inflation should be the top priority of the next administration and fighting inflation is always a balancing act. We cannot abruptly increase fares because it will spill over to food and to other things to minimum wage. So it’s really a balancing act. But in that balancing act we can also inject intervention such as subsidies, such as the Pantawid Pasada and the Pantawid Pasada seems to be a more economical approach, at least in the near term.” Butch Fernandez
Image credits: Nonoy Lacza