The Department of Energy (DOE) has asked Congress to amend Republic Act 8479, better known as the Oil Deregulation Law, in the wake of rising fuel prices.
In his letter to House energy committee chairman Rep. Mikey Arroyo and Senate energy committee chairman Sen. Sherwin Gatchalian, Energy Sec. Alfonso Cusi stressed the need to revise the law to allow the government leeway in addressing sudden or prolonged oil price spikes.
The request comes in after a continuous eight-week upward trend in oil prices leading to a seven-peso average increase in just under two months. Pump prices in Metro Manila have reached the mid-Php50 per liter level for diesel and the Php70/liter level for unleaded gasoline.
Cusi attributed the price spikes to the resurgence of demand for fuel amid increasing vaccinations against COVID-19 and the loosening of quarantine restrictions worldwide and the stocking of petroleum products ahead of the winter season in major economies.
He also cited the slowdown in oil production due to the focus on low-carbon emitting sources; international sanctions on major oil producers like Iran and Venezuela, which has hampered oil firms from drilling and buying oil products from the said countries; and Hurricane Ida, which affected the United States’ crude oil production.
Before the pandemic, the latest recorded total worldwide supply was around 104 barrels a day. To cope-up with the supply, the Organization of the Petroleum Exporting Countries (OPEC) committed to increase the production and supply of crude oil by 400,000 barrels/day. The OPEC will meet on November 4 to discuss and reassess the situation.
The Philippines utilizes the equivalent of 425,000 barrels/day, which is around 0.4% of the world supply.
The DOE also met with oil companies to ensure stable supply. It also asked if discounts could be given to the public. Jetti, Seaoil, Shell, Phoenix Petroleum, and Unioil were among the oil firms that agreed to extend discounts to the public transport industry on top of existing promotions like vaccination and loyalty incentives.