'Oil price freeze could lead to fewer bus trips'
abs-cbnNEWS.com | 11/06/2009 8:21 PM
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MANILA - Instead of rejoicing over government-imposed controls on oil prices in calamity-hit areas such as Metro Manila, a party-list representative on Friday said the government order has resulted in price distortion of petroleum products for local bus companies.
1-Utak party-list Rep. Vigor Mendoza said bus operators did not benefit from Executive Order 839 freezing oil prices in Luzon to October 15 levels since bus companies usually buy petroleum wholesale.
He said that before the oil price freeze, bus companies could get a P4 to P6 per liter discount on petroleum. He said the new EO means that bus companies are spending P2 more per liter compared to regular car owners.
"What's worse, oil companies are now charging more for wholesale purchases because of their losses," he said.
Mendoza said bus companies could lose as much as P3 million per month if the EO remains in effect. He said, however, that lifting the EO could lead to a bus fare hike if a projected P4-P5/liter oil price hike is implemented.
He said that instead of lifting the oil price freeze, Malacañang should amend the executive order to include wholesale pricing of petroleum and so benefit bus companies.
There are an estimated 30,000 buses in the country.
Mendoza also urged the Department of Energy to use government revenues from sales taxes on petrolum to implement a fuel subsidy once EO 839 is lifted. He said this would ensure that local motorists would not be severely affected by expected pump price hikes.
He said the government could distribute P2/liter discount coupons to motorists, which could be used everytime they buy petroleum.
Regarding a proposal by Raul Concepcion, chairman of the Consumer and Oil Price Watch, to amend the Oil Deregulation Law, Mendoza said Congress would not have enough time to amend the law because of many other priority bills in the pipeline.
President Arroyo earlier said she remained determined to keep the temporary oil price freeze despite strong clamor from industry leaders and business groups.
A Palace spokesman said Mrs. Arroyo will not be pressured into lifting the order unless otherwise recommended by the Joint Department of Energy-Department of Justice Task Force.
Press Secretary Cerge Remonde asked oil companies to stop scaring people by making dire projections of oil price increases once the government-imposed price ceilings on basic products are lifted.
"We appeal to [oil companies] to stop making grim warnings [and] dire projections," Press Secretary Cerge Remonde said during a media briefing at Malacañang.
He added: "The government is not out to drive them to bankruptcy. We ask them to understand the condition of our people because of the calamities."
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