Transport group calls for revival of OPSF amid high and unstable oil prices – Manila Bulletin
The national government should consider reviving the Petroleum Price Stabilization Fund (OPSF) amid the string of oil price hikes over the past few months and the uncertainty of oil price stability due to the ongoing war between Russia and Ukraine, a transport group said on Saturday. June 11.
Since January this year, the price of gasoline has increased by 23.85 pesos per liter, 30.30 pesos per liter for diesel and 27.65 pesos per liter for kerosene.
Lawyer Vigor Mendoza II, chairman of transport group 1-UTAK, said the revival of OPSF will help the public cope with rising oil prices, especially that there was already a shortage of public utility vehicles, especially in Metro Manila, as some drivers and operators have decided. to stop the operation during the series of oil price increases.
Some farmers and fishermen are also reported to have resorted to alternative livelihoods as they could not afford the price of petroleum products they use in farming and fishing.
Mendoza said that the adverse effects of rising oil prices require the formulation and implementation of measures that will mitigate the effect of oil price instability, one of them is the revival of the ‘OPSF that President-elect Ferdinand “Bongbong” Marcos himself supported during the campaign period.
Mendoza said he agreed with Marcos when the latter appeared before a town hall in Marikina with transport groups and other groups during the campaign period.
“I support the position of new President Ferdinand “Bongbong” Marcos Jr, to once again come up with something like an oil price stabilization fund with maybe a little improvement,” Mendoza said.
“The program will ensure that there is a fund that can be used not only to subsidize fuel for drivers, but also to modernize the transport sector and to support transition measures to alternative fuels,” he added. .
The national government used to set aside funds to cushion the impact of any rise in oil prices that would already trigger instability in the prices of goods and services. This was done through a government subsidy on fuel price adjustments.
But the program was already halted in the mid-1990s following the enactment of the Petroleum Deregulation Act and due to some issues, including reports that the government then owed billions of pesos to oil companies.
This is where adjustments need to be made in order to ensure that the OPSF-like program would succeed, according to Mendoza.
As part of the revival of the OPSF-like revival, Mendoza explained that in times of lower fuel prices, part of the funds saved due to lower oil prices should be set aside to subsidize prices. fuel for the public transport sector.
And when prices go up, he said oil companies should set aside some of the increase in that fund as a deductible expense, not as part of gross sales.
Mendoza pointed out that this program is one of the long-term approaches that the government can consider instead of implementing one-off aid solutions like providing fuel subsidies.
He further stated that the provision of fuel subsidies depended on budget allocation.
Mendoza also compares the program to two-tier fuel pricing where the transport sector received special discounts ” “The key here is good management of funds and must be protected against wrongdoing. “
In addition, the fund should come from the oil companies through a deductible expense to accelerate the growth of the fund,” he stressed.
Fuel storage facilities
Mendoza also proposed the establishment of strategically located fuel storage facilities or a more cost-effective fuel delivery system, such as a pipeline.
“This is aimed at reducing the cost of delivery, which is one of the key factors driving up prices.” If our fuel storage facilities are closer to demand, the cost of delivery will be much cheaper,” Mendoza said.
He also expressed support for the concept of Metro Manila Transport Corporation implemented under the Marcos administration and revived during the tenure of former Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Tom Lantion, where the government purchased public utility vehicles and leased them through qualified transportation groups. .
“I think it is a very new concept that will stimulate modernization and at the same time reduce the cost of operations through savings on interest charges if transport groups could benefit from loans to buy new vehicles,” Mendoza said.
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