Historic numbers

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Price boards at local gasoline stations were not designed for three-digit fuel prices.

Petron Corp., the oil company with the greatest number of gas stations in the country at over 2,400 nationwide as of early last year, in fact had to use tarpaulins temporarily when diesel prices hit P100 per liter. They had to recalibrate the signages in order to display three-digit prices instead of the usual two.

Diesel prices breached the triple-digit mark for the first time last March 17.

But of course, this situation is nothing compared to what Filipinos have to face at the moment.

If the reduced number of vehicles plying Metro Manila roads is any indication, Filipinos would now rather take the MRT or LRT to go to work than use their private vehicles. The Department of Transportation-Special Action and Intelligence Committee for Transportation has observed an increase in the number of commuters amid the fuel price hikes brought about by the ongoing tension in the Middle East. The increase in train ridership is also due to the 50 percent discount now effective for MRT Line 3 and LRT Line 2 to help ease the impact of rising fuel prices on the public.

Meanwhile, several bus operators have reduced their number of units in operation aside from cutting trips due to high fuel prices.

Transport network vehicle service operators are reportedly losing P500 to P700 a day due to high fuel prices and many of them are quitting because they take home only P300 after working 18 hours a day.

It is not only land transportation that is affected. Cebu Pacific recently announced that it is trimming part of its international network, suspending several routes until October and reducing frequencies as part of measures to keep operations stable and sustainable as the crisis has pushed global jet fuel prices to more than double the 2025 averages.

Even Philippine Airlines has resorted to temporarily suspending flights on a number of routes, both international and domestic, due to changing conditions affecting global aviation.

The International Air Transport Association reported that jet fuel prices have gone up by 58 percent to $157.41 per barrel as of March 6. Jet fuel prices rose the steepest in Asia, by 77 percent, because of its reliance on oil coming from the Middle East. And this situation will likely force the Civil Aeronautics Board to adjust fuel surcharge for the first time in eight months.

Local shipping lines have likewise resorted to trimming their daily trips and increasing passenger fares to cope with spiking fuel costs. Shipping companies are allowed to raise rates and are not covered by the fare hike freeze announced by the President last week.

The Maritime Industry Authority said that it has authorized ship operators to collect a fuel surcharge of up to 20 percent of base fares and to adjust their operations by consolidating or reducing trips to optimize vessel use in the interest of cutting fuel consumption.

The problem was compounded when the value of the Philippine peso breached the 60 per US dollar mark for the first time, making dollar-denominated fuel imports even more costly.

Consumers are now feeling the ripple effect on prices of everyday goods.

President Marcos had just signed into law a bill granting him the power to suspend or reduce excise tax on petroleum products as part of government’s initiatives to cushion the impact of soaring fuel prices. Any suspension or reduction would be effective for a period not exceeding three months, provided that the aggregate period of the suspension of reduction shall not exceed one calendar year.

Republic Act 10963 or the TRAIN Law provides for an excise tax rate beginning Jan. 1, 2020 and onwards of P10 per liter for unleaded premium gasoline, P5 for kerosene, P4 per liter for aviation turbo jet fuel, P6 per liter for diesel fuel oil and P6 per kilo for LPG used for motive power and P3 per kilo for LPG.

According to a report from the Congressional Policy and Budget Research Department of the House of Representatives last year, in the ASEAN region, excise taxes on gasoline range from five to 40 percent, with an average of 16.3 percent. The Philippines charges P10 per liter or 15.6 percent of the pump price which is lower than the regional average. For diesel, excise taxes in the region range from five to 21 percent with the Philippines charging P6 per liter or 11.1 percent of the price – the third lowest in the region and below the regional average of P7.30.

Officials of the finance department earlier said that the country could see a P136-billion decline in revenues in 2026 if the excise tax on petroleum products is removed. Of this amount, P121.4 billion would come directly from excise tax reductions while P14.6 billion would be from lower VAT collections. Since the numbers only apply from May to December 2026, the estimated losses could be higher if excise taxes are suspended earlier and if crude oil prices rise further since VAT collections are directly proportional to fuel costs.

Lower revenues mean a higher budget deficit, unless the government resorts to borrowings amid rising global interest rates to fund its programs.

The crisis in the Middle East unfortunately is far from over. Our fuel stocks levels are low, even though no one would like to admit it to avoid panic.

Our political problems now seem petty compared to what we are now experiencing and about to experience.

While our government officials are wracking their brains to find stop-gap measures in order to cushion the effects on our people and the economy, we also have to do our part.

The International Energy Agency recently released a number of recommendations to reduce energy consumption. These include allowing employees to work from home, reducing the work week, using LED bulbs instead of incandescent and halogen lights, turning off lights when not needed, encouraging public transport and car sharing or carpooling schemes, turning off vehicles when waiting rather than leaving engines idle, walking or biking to work, limiting air travel, to name a few.

Small steps go a long way.

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