The Department of Energy (DOE) has asked Congress to amend the Oil Deregulation Law, proposing the unbundling of the cost of petroleum retail products to determine their true and passed-on costs.
The DOE’s proposal comes at a time of rising fuel prices.
The DOE in a statement said changes in the law would provide a framework for the government to intervene and address sudden, prolonged oil price spikes.
The DOE said the unbundling of oil prices would result to greater market transparency by establishing the trends in the prices of oil and finished petroleum products. This, in turn, would help ensure a level playing field within the oil industry, while upholding the best interests of consumers.
DOE Secretary Alfonso Cusi in May 2019 issued a department circular requiring the unbundling of oil prices for its data gathering and policymaking function but the order was not implemented.
The DOE obtained the commitment of Jetti, Seaoil, Shell, Phoenix, and Unioil have o extend discounts to the public transport industry on top of existing discounts currently given like vaccination and loyalty incentives.
The DOE said Cusi in a letter to Committee on Energy chairman Senator Sherwin Gatchalian and Rep. Juan Miguel Arroyo attributed the prolonged oil price spike to a continuing rise in world market prices resulting from the sudden global increase in demand and an unanticipated lack of supply.
Demand is estimated at 103.22 million barrels a day versus a supply of 100.32 million barrels/day.
Higher demand is due to the following: surge of economic activities due to the containment of COVID-19; the stocking of petroleum products’ inventories as winter approaches; slowed production due to the current global direction of sourcing energy from low-carbon emitting sources; international sanctions to oil-producing countries like Iran and Venezuela; and Hurricane Ida category 4 storm that hit the US gulf coast on August 29 which had caused an estimated loss of US crude oil production by as much as 30 million barrels.
The Philippines utilizes the equivalent of 425,000 barrels/day, which is around 0.4 percent of the world supply.
