Government Urged To Prepare For Oil Price Hikes; 'Fast track Law On Electric Vehicles' - Solon

A Philippine lawmaker on Tuesday warned the government of a possible increase in oil prices after the Organization of the Petroleum Exporting Countries and its allied oil producers (collectively known as OPEC+) announced further cuts in their production to around 1.16 million barrels per day.

"This event is unfortunate, and the government should immediately take actions that would cushion the impact of a possible effect on the domestic economy, particularly since this would further intensify inflationary pressures," Senator Sherwin Gatchalian, Senate Energy Committee Vice Chairperson said in this report.

To cushion the impact of oil price hikes among consumers, especially in the transport sector, Gatchalian called on the Department of Energy (DOE) to immediately coordinate with stakeholders and industry players to ensure a sufficient and steady supply of energy in the country.

Gatchalian also asked the Land Transportation Regulatory and Franchising Board (LTFRB) to prepare for an efficient and timely implementation of the "Pantawid Pasada" program – a subsidy program for the transportation sector.

"To avoid delay in the disbursement of the subsidy and to ensure the desired impact is realized, the LTFRB and other government agencies concerned should be ready to implement the program efficiently and should have learned the lessons from previous disbursements," the senator added.

Gatchalian filed Senate Bill 384 in July 2022 seeking to institutionalize the "Pantawid Pasada" program that will establish an energy subsidy program to help the transportation sector against oil price shocks.

OPEC+ on Sunday announced their surprise move which they claimed would support market stability. The announcement on planned cuts in oil production came a day before a virtual meeting with the OPEC+ ministerial panel, which includes Saudi Arabia and Russia. The voluntary cuts are expected to begin in May until the end of this year, Reuters noted.

The report calculated the total volume of cuts by OPEC+ and its allies to 3.66 million bpd which is equal to 3.7% of global demand. Oil prices in March fell toward $70 a barrel, the lowest in 15 months brought about by a concern that a global banking crisis would hit demand.

With the looming increase in oil prices, Gatchalian also urged the DOE to accelerate the implementation of the Electric Vehicle Industry Development Act (EVIDA) to lessen the country's dependence on imported oil in the future.