Putin’s war impacts on food, fuel, fares
With every household hit hard by the rising prices of nearly everything, some moves suggest themselves: price controls on essential items, fuel subsidy, suspension of the excise tax on oil, and even the selective restoration of the work-from-home arrangement.
The Philippines may be a minor player in the global trade of fossil fuel but the average Filipino need not know macroeconomics to feel the impact on his family — and to suggest remedies.
Benchmark Brent crude was priced at $131.35 per barrel as of 10:30 p.m. Tuesday. Its contract price rose and settled above $100 on Feb. 28, within the week of Russia’s invasion of Ukraine on Feb. 24.
Russia is the world’s second-largest (at 12 percent) oil producer and the second largest (at 16.6 percent) supplier of natural gas. About 70 percent of Russian gas exports to Europe pass through three major pipelines in Ukraine.
The invasion of Ukraine is not all about oil or fuel, or the other commodities that Moscow exports and imports. It is the outburst of a host of other things roiling the mind of Russian President Vladimir Putin.
The Philippines does not buy oil from Russia, but Putin’s war is of such scale and ferocity that it has affected even distant barangays, daily-wage workers everywhere, and commuters in Metro Manila and other urban centers.
With no indication that his war would end soon, a number of analysts have raised the possibility of the price of oil soaring to $150 per barrel, the highest ever.
• Racing against rising cost of fuel
To economists in the academe and the government, the bulk (71.52) of the 100 points of the consumer price index that they use to measure inflation or the rate of movement in prices goes to food (38.98), utilities (22.47), transportation (7.81), and communication (2.26).
We look around wondering who in the government can still be trusted to help us survive the tsunami of rising costs of food, fuel, and fares whipped up by Putin’s war coming after the pandemic claimed the lives of at least 57,100 Filipinos.
Despite the dreary scenario, surveys say that 45 percent of the 110-million population claim to see a better year (with a tinge of pink?) after the May 9 elections. As we often say, the Filipino inured to life’s challenges is the eternal optimist.
With just two months left in his term, President Duterte is under pressure to declare an economic emergency and call the Congress to a special session to take speedy action to soften the impact of rising prices.
Before the legislature closes the debate over fuel subsidy for public transportation, ayuda (financial help) for drivers/operators, and the restructuring of fares for jeepneys, buses, and trains, we would like to see the government do a quick transparency move.
The authorities must disclose a breakdown of the retail or pump price of gasoline, diesel, cooking gas, and other fuels to show the landed cost of the crude or finished import and the various costs added until it is pumped into a motor engine or fed to a diesel power plant.
This is so people would know how much of the pump-peso goes to the importer, the refiner, the government, etc. We want to see if the government or the others on the gravy train are grabbing too much and charging it to the consumer?
The answer to that will help make the public understand fuel’s retail pricing and the manner of subsidies and ayuda, especially if they are assured that the add-on costs are not eaten up by corruption.
The government may also want to review its decision to lift the work-from-home arrangement that had reduced the commuting of workers, including government personnel. Some offices have been able to operate efficiently, if not more so, with less crowding in the premises.
The well-planned reduction of office staff by having some personnel work from home had reduced costs of working space, parking, supplies, and utilities (including electricity and water). In some cases, it has even improved efficiency.
With fewer people commuting, there has been less demand for motor fuel and vehicle maintenance, reduced air pollution, and smother flow of traffic. Refinement of the work-from-home scheme must be studied.
• Duterte asked to call special session
In its meeting Monday, the ad hoc House committee studying the rise of oil prices agreed to recommend that a special session of Congress be called by President Duterte for a quick wide-ranging response to the problem.
Albay Rep. Joey Salceda, House ways and means committee chairman who co-presided over the meeting, said declaring a state of economic emergency will enable local governments to tap their calamity funds to address the impact of rising fuel prices.
“Ang pinakamabilis diyan (the quickest step) is for the President to declare a state of economic emergency to enable him to use the calamity fund or for local government units to use their calamity funds to provide relief to tricycle drivers, farmers, and fisherfolks,” he said.
The President’s calling a special session will facilitate legislation, including a bill suspending the excise tax on crude and oil products which raises the pump price and adds to the cost of goods and services down the line.
Salceda said the President should call a special session on March 15 if the world price of oil is still above $100 per barrel.
“We need to draw a line on the sand,” he said. “It is his moral obligation to the people to provide relief because that means almost 75 days of suffering already.”
Rep. Sharon Garin, House economic affairs committee chair, said the review of the oil deregulation law, a move earlier pushed by Malacañang, can also be taken up if a special session is called.