The Myth of Arroyo’s Power Crisis

Published on August 27, 2005

Oil companies have been overpricing the public in the past years, as they took advantage of automatic price hikes allowed under a deregulated regime. In a review of pump prices from 2000 to 2004, Ibon Philippines found that oil products have been overpriced by a total of PhP3.68 per liter.

By Maria Salamat
Bulatlat.com

The Arroyo government is projecting a vigorous can-do attitude vis-à-vis what they call as looming oil crisis in the Philippines. Scaring the public that it will be more severe than the 1974 and 1979 oil crisis, President Macapagal-Arroyo is also using the oil issue to try to stabilize her presidency and twit the ouster moves against her. She has been calling for “unity” to face the said oil crisis; her press secretary has said it’s an issue far more important than politics.

To address this looming crisis, Malacañang (the presidential palace) unveiled a set of measures last week designed to conserve energy, reduce its overall consumption, and exploit alternative sources of fuel. Macapagal-Arroyo called for a “change of lifestyle.” She appealed to businesses to reduce oil and electricity consumption, modify work hours and implement measures in their operations to “strengthen productivity while saving on energy.” She urged the granting of public transportation franchises to vehicles using alternative, renewable and indigenous fuels.

Her cabinet also lined up specific measures. The Department of Energy (DoE) is working for the opening of the first compressed natural gas (CNG) mother-daughter stations and its use by few buses utilizing CNG. These have been delayed for months, but Energy Undersecretary Peter Abaya said it will start operation by September this year. The DoE also plans to push for the establishment of a CNG depot next year to ensure supply in Metro Manila.

In a conference on oil prices, Abaya stressed the need for it as no one so far wants to invest in a pipeline which will bring CNG from Batangas to Metro Manila.

The DoE is also searching for foreign investors to fund projects in putting up power plants that use indigenous energy sources like wind, sun, hydrothermal and geothermal. They’re also studying the possibilities of coal liquefaction. And with the Supreme Court’s decision on allowing foreign equities in mining, the energy department is also attracting mining corporations to pursue oil drilling, exploration and extraction in the Philippines’16 identified petroleum basins.

The Department of Finance (DoF), meanwhile, has lined up several measures like removing the excise tax on diesel, kerosene and bunker fuel, and slashing import tariffs on petroleum products from 5 percent to 3 percent, except for LPG on which no tariff is imposed. These would reduce the price of diesel by as much as P1.63 per liter and the pump price by as much as P0.50 per liter, according to Finance Secretary Margarito Teves.

Still, Energy Secretary Raphael Lotilla warned the public not to allow a situation where the government would have to ration gasoline and diesel to them.

The Myth of Arroyo’s Power Crisis

By Maria Salamat
Bulatlat

Gasoline boy washes pump

Photo by Ace Alegre

In a conference on oil prices, Abaya stressed the need for it as no one so far wants to invest in a pipeline which will bring CNG from Batangas to Metro Manila.

Still, Energy Secretary Raphael Lotilla warned the public not to allow a situation where the government would have to ration gasoline and diesel to them.

Energy measures’ ignored realities

All these talks of conservation and possible rationing are not signaling an imminent global oil shortage, however. Crude supply is plentiful. Spurred by high oil prices, most oil-producing countries are cranking up their production. According to Sheikh Ahmad Fahad Al Sabah, Kuwait’s oil minister, “These incremental volumes have led to global supply exceeding demand over the last two years.” At the end of July, too, crude stocks in the United States were at their highest since 1999.

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