Department of Energy (DOE) Secretary Alfonso Cusi said prices of petroleum products are expected to further increase until early next year with the current shortage in oil supply in the world market.
In a television interview with, Cusi attributed the oil price hike for the past eight weeks mainly to developments in the global market.
Global supply is still lacking around 3 million barrels per day (bpd) as oil producers and exporters are only supplying 100 million bpd while demand is at 103 millions bpd.
The Organization of Petroleum Exporting Countries and its allies (OPEC+) is sticking with its plan to only increase output by 400,000 bpd until April 2022 despite the rising demand as many countries are recovering from the impacts of the pandemic.
Cusi said although the Philippines is able to get the needed supply of 435,000 bpd, oil prices still depend on trading in the world market.
For the past two months, local prices of diesel have gone up by P8.65, gasoline by P7.20, and kerosene by P8.05.
But with all the initiatives that the government is trying to do, the DOE chief is hoping that price hikes in the local market will be tamed.
Subsidy not fare hike
As public utility vehicle (PUV) drivers are calling on the government for a fare hike amid the rising fuel cost, Cusi said he is personally against this proposal.
“We (DOE) opposed (the fare hike). Let us find a way like the Pantawid Pasada and all other subsidies that we can provide for the public sector,” he said.
Taking into account that dramatic oil price hikes may repeat in the future, Cusi said the DOE has asked lawmakers to amend the oil deregulation law.
“To give DOE more authority in cases like this and to get back (the) government’s participation in oil trading,” he added.
The energy chief said legislative policies are needed to allow DOE to have more authority to intervene when there are big-time oil price hikes for a long period.
He said the Bayanihan Law has allowed the suspension of the collection of excise tax on oil when global oil prices breached the $80-level. However, this legislation has already expired.
“What we would like in the law is the authority to suspend it (excise tax) to certain abnormal conditions,” Cusi said. “In (a) situation like this, our hands are tied.”
If excise tax on oil will be suspended, an estimated P8 to P10 per liter will be reduced from pump prices, he said.
“We need a law to do that,” Cusi said, adding that an executive order from the Palace alone cannot halt the collection of excise tax on petroleum products.