DOE: No fuel price cap

DOE: No fuel price cap MANILA, Philippines — Even as staggering fuel costs continue to bedevil consumers, the Department of Energy (DOE) said it is not inclined to recommend a price cap on petroleum products, as doing so could disrupt industry operations. “If (the government) says P100 per liter and the price in the international market is P110, no one will do business with oil,” Energy Secretary Sharon Garin said in an interview with radio dzMM. “No one will import, no one will sell, so that will be, I think, the worst situation.” She stressed the DOE is more focused on curbing profiteering activities. “What we don’t want is abused profit, that’s why we are monitoring and making guidelines for that,” she said. Sen. Sherwin Gatchalian, chairman of the Senate finance committee, earlier said certain provisions in the Downstream Oil Industry Deregulation Act of 1998 are “broad enough” to allow the President to put a cap on fuel prices during national emergencies. The word “emergency” in Republic Act 8479 can only be found in Section 14(e), authorizing the energy secretary to “temporarily take over or direct the operation of any person or entity engaged in the [oil] industry” during national emergencies, “when the public interest so requires.” Under the law, the president can only reduce the three-percent tariff imposed on imported crude oil and refined petroleum products and direct the energy chief to investigate erring oil companies. Through Executive Order 110, President Marcos has placed the Philippines under a state of national energy emergency, effective for one year. For Bob Herrera-Lim, managing director at the New York-based analytics firm Teneo, price caps should be the government’s last resort, stressing that the priority should be on maintaining a stable fuel supply and providing targeted subsidies to the hardest-hit sectors. “Price controls are very dangerous because if you control the price of diesel … people will just say, ‘okay, I’ll keep on buying as much diesel as I like, stocking up, filling up my tanks every day,’” Herrera-Lim said in an interview on One News. New supplies arriving The Philippines has begun receiving 142,000 barrels of fuel ordered by the Philippine National Oil Co., to serve as buffer stock. Garin said the DOE is spreading out the deliveries since the government doesn’t have its own fuel storage facilities. Some of the new supplies arrived at a port in La Union on Wednesday, Garin said, with the rest scheduled to arrive in Batangas on Saturday. Yesterday, the PNOC said it is finalizing the purchase of 600,000 barrels of oil, bringing the confirmed orders to one million barrels. Militant lawmakers, meanwhile, have renewed their call for the repeal of the 28-year old Oil Deregulation Law, saying it has failed in its purpose of stabilizing prices and has in fact made oil manufacturers even richer. — Delon Porcalla - Latest - Trending