Bigger price drop for diesel seen next week

(UPDATE) THE price of diesel is expected to drop by P5.50 to P6.50 per liter, a bigger decrease than what had been earlier projected. Diesel was originally expected to go down by only P3.50 to P2.50 per liter. The new estimate was released on Friday. Gasoline will have a smaller price rollback of P1 per liter. The estimates are based on the Mean of Platts, Singapore, the pricing basis of refined goods in Southeast Asia. “Fuel prices are expected to roll back next week as, despite the recent developments, the ceasefire between US and Iran is expected to hold,” a source in the local oil industry said. On Friday, Energy Secretary Sharon Garin said the price drop reflected favorable global market trends. “If the current trend continues, there could be a rollback,” Garin said. The rollback would complement fuel subsidies being extended to the transport sector, she said during a briefing in Malacañang. Garin said President Ferdinand Marcos Jr. was expected to announce his decision to suspend or reduce the fuel excise tax next week. She said the Department of Energy (DOE) has submitted certification that the average price of Dubai crude oil has breached $80 per barrel for a month, a requirement under Republic Act 12316 that authorizes the president to adjust the fuel excise tax. Suspending the excise tax would bring down pump prices by P6 per liter for diesel and P10 per liter for gasoline. Kerosene would be cheaper by P5 per liter. Garin also said the government was not considering fuel rationing, since the country’s current petroleum supply remained adequate. During the same Palace briefing, Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Vigor Mendoza II said the pilot run for the P10 per liter fuel subsidy will be rolled out in Metro Manila this weekend, starting with public utility vehicle drivers and operators. Mendoza said an initial budget of P1.5 billion has been allotted for the fuel subsidy, which would cover up to 150 liters per week per vehicle until July. He said the program would eventually cover about 142,698 jeepney and UV Express units nationwide, with the involvement of around 14,000 gas stations. For its part, the Department of Transportation (DOTr) will roll out a P1-billion net service contracting program beginning April 15, offering financial assistance to PUV operators while granting a 20-percent fare discount. Transportation Secretary Giovanni Lopez said the initiative covers jeepneys — both traditional and modern units — UV Express vans, city buses, and EDSA Carousel buses. “We know that with the continuous increase in oil prices, it is dangerous for our public vehicles to operate. Some are reducing trips; others are not plying their routes,” Lopez said. P800 million has been allocated for road-based transport, while P200 million will go to the maritime sector — marking the first time the program will include boats and fast craft services. Bus operators will receive P100 per kilometer, and modern jeepneys and UV Express units will receive P40 per kilometer. Traditional jeepneys will be paid P20 per kilometer. Participating vehicles are capped at 100 kilometers per day and five operating days per week. The program will initially cover 823 routes nationwide, including 545 in Metro Manila, Cavite, Laguna and Rizal. Priority will be given to feeder routes connecting to major transit systems, such as MRT-3, where separate fare subsidies are already in place. The Department of Social Welfare and Development (DSWD), meanwhile, hopes to complete the first batch of cash relief assistance (CRA) for public utility vehicle (PUV) drivers outside Metro Manila by April 30. DSWD Secretary Rexlon Gatchalian made the statement during visits to payout sites in Cabanatuan City and Angeles City, where cash distribution has started. Gatchalian said preparations are underway for the second round of assistance. A transport group, Manibela, slammed the government’s planned service contracting program for PUVs, saying the measure would benefit commuters more than drivers and would do little to ease the fuel crisis that is affecting jeepney drivers. Manibela Chairman Mar Valbuena said the program, which will be launched on April 15, would cover only around 15,000 PUVs out of about 280,000 units nationwide. He said the limited reach of the program would leave most drivers without meaningful relief and would not address the continued squeeze on their daily earnings. Valbuena said the fuel subsidy being discussed alongside the service contracting plan was too small to offset rising fuel costs, leaving drivers to shoulder most of the burden. Government should direct fuel discounts and other assistance to drivers, not passengers, because drivers are the ones absorbing the impact of oil price hikes while keeping their units on the road, he said. He said transport groups were not consulted in preparing the response to the oil price crisis. Valbuena said some drivers had already stopped plying their routes because of poor earnings and insufficient government support.

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