By Sheldeen Joy Talavera, A reporter
MOTORISTS finally got a much-needed break after weeks of steep hikes, as the Department of Energy expects a reduction in pump prices, as diesel prices are seen dropping by at least P20 per liter (/l).
Energy Secretary Sharon S. Garin said the price of diesel may drop by at least P20.89 per liter, gasoline by P4.43 per liter, and kerosene by P8.50 per liter starting Tuesday, April 14.
“It is based on the average of the last five days of international prices and we compare that with the average of the previous week,” he wrote on Facebook on Sunday.
Mrs. Garin said that while not all gas stations have the same pump price, the proposed recall represents an expected decrease.
If possible, this would be a first for diesel prices this year. This would reduce the price of diesel to P150 per liter.
The war in Iran, now in its second month, has driven up global oil prices and disrupted oil supply lines. The Philippines, an oil importer, is facing rising price pressures amid global market volatility.
Industry sources earlier said global oil prices fell after the US and Iran agreed to a ceasefire to end the nearly six-week conflict.
While this provides temporary relief, analysts have warned that volatility and uncertainty may continue as the recession remains unclear.
The US and Iran have failed to reach an agreement to end their war despite marathon talks that concluded Sunday in the Pakistani capital Islamabad, jeopardizing a fragile ceasefire.
Each side blamed the other for the failure of 21-hour talks to end the fighting that has killed thousands of people and sent oil prices soaring around the world since it began six weeks ago.
Traffic through the Strait of Hormuz, which is used to transport one-fifth of the world’s oil and gas supplies, remains at half of pre-war levels, according to Reuters.
“Without the re-opening of the Strait of Hormuz and credible assurances that commercial vessels can navigate safely, global oil flows are unlikely to see meaningful development,” Jun Hao Ng, assistant Asia Macro economist at Oxford Economics, said. BusinessWorld.
He added that disagreements and uncertainty about the ceasefire are emerging, increasing concerns about further disruptions.
Meanwhile, consumers may also expect a further drop in pump prices if President Ferdinand R. Marcos, Jr. who will use his power to stop the fuel excise tax.
Signed on March 25, Republic Act No. 12316 gives the President the authority to suspend or reduce excise taxes on petroleum products. The law goes into effect on April 13.
The suspension of fuel tax collection would reduce the pump price by P6 per liter of diesel and P10 per liter of gasoline.
Jose Enrique “Sonny” A. Africa, executive director at the IBON Foundation, said the suspension of the fuel tax will provide immediate relief to about 21 million low-income people.
“The majority of the poor and vulnerable Filipinos will get complete relief from the reduction in the oil tax if the producers pass on the relief they feel in the prices they charge, which will be better assured if the government takes this problem seriously and declares a national emergency to implement price controls under the Price Act,” said Mr. Africa. BusinessWorld.
He said the excise tax on fuel should be suspended forever, because the tax on oil is decreasing and does nothing to significantly reduce the consumption of petrol.
“Revenue is best generated through continuous direct income tax and wealth taxes, and over-reliance on fuel is best reduced by increasing public transport, promoting EVs (electric vehicles), and especially increasing public investment in renewables,” said Mr. – and reports from Reuters
