For some time, I was an intern in Fisherfolks Development Incorporated (FIDEC Inc.). I was fortunate enough to have the opportunity to see the other side of the world – where there are no malls, coffee shops, boutiques, internet cafe and other luxury shops. The place for marginalized Filipinos. Oil is one of the many concerns of Fisherfolks (one of the marginalized).
OIL: One Commodity to Rule Them All
Oil is considered the life blood of the world. And because of the world’s dependency on oil, it has defined the way people live.
But for the past year, oil price has been cruel.
Prices for diesel, gasoline and kerosene in the Philippines climbed sixteen times since January of 2011.
In the Philippines, 9.4 million households are informal settlers and underprivileged. Most of these households are disconnected from power services thus they resort to candles and improvised kerosene lamps. Most of the underprivileged are farmers, fishermen and other marginalized sector of the society. Because of this, oil has bigger impact in their lives.
The increase had brought 225 pesos additional daily expenses for 426, 000 jeepney drivers; 75 pesos additional expenses per fishing trip for 708,000 small fishers; and additional 31 pesos and 50 centavos additional monthly expenses for millions of households which use kerosene for cooking or lighting.
The Oil of Power
It is no longer a secret about the discrepancies among the oil companies and the government.
there is no actual shortage, only fears of shortage.
It is not made according to any traditional relation of supply and demand nor there’s truth to oil shortage.
More than eight out of every 10 liters of oil sold in the domestic market are from just four companies (Petron, Shell, Chevron, and Total) with tight links to the global oil cartel. They set the price adjustment and everyone else just follows.
Aside from the oil price hike that had been affecting individuals globally, Filipinos bear the greater burden of soaring prices because of the Oil Deregulation Law or Republic Act (RA) 8479.
Oil companies have been taking advantage of the deregulation to overprice their products. There is 7 pesos and 50 centavos overpricing of petroleum products per liter from 2008.
To sum every P7.50 that oil companies rob from every Filipino consumer, oil companies receive a total ofP 369, 950, 000 every day of extra profit due to overpricing.
But the administration is doing nothing to put an end to this atrocious overpricing, because when prices are high so as the VAT that the government issues to every oil products.
The Aquino administration claims helpless in the soaring prices of oil because local prices according to them are dictated by the global oil market. Despite the persistent allegations of overpricing, the government has not taken a more hands-on stance in ensuring fair oil prices.
Because of this, since the implementation of Oil Deregulation Law, oil price increased for more than 653 percent in its average retail.
Interestingly, for 13 years since the joint task force of Department of Justice (DOJ) and Department of Energy (DOE) against petroleum products’ overpricing, there is no single oil company has been penalized for overpricing.
Because oil is an important commodity, lots of power has already been given to oil companies and because the government continues to disregard the faults of the Oil Deregulation Law even more power were given to the these companies to abuse.
The Crack of Doom: The Threat of Even Worse Poverty
In the Philippines, 70 percent of its population is living less than a hundred pesos a day and 24 percent or around 4.4 million families experience hunger.
Indeed, in poor countries like the Philippines, where families’ daily food intake depend on small earnings, high prices become a political issue.
As a whole, according to Central Bank of the Philippines, in every P1/liter oil price hike, inflation rate also increase to 0.10 – 0.14percent. Thus, there is general increase in prices of basic goods and services.
Sadly the current administration still continues the past governments’ bias towards the so-called market forces, the interest of private investors and minimal state intervention.
Thus, 4.4 million Filipino families has no other choice but to suffer for it may take some time to eat their next meal again.
For the 70 percent of Philippine population whose profession mainly includes fishing, even more debts await their homes because their every-day earnings are just enough to buy 2 to 3 liters of gasoline for their next trip to the sea.
Because of the continuing oil price hike, fisher folks are fishing not for their food but rather for the gasoline that take up 70 to 80 percent of their daily income.
The Return of the Government
The Department of Finance (DOF) is reportedly considering subsidizing oil products consumed by the poor and reducing the VAT on petroleum. These measures are apparently the most “drastic” proposals that government is ready to make.
Malacañang has approved a P500-million reduced to 450-million fuel subsidy through Executive Order (EO) 32. President Aquino III said that the money comes from “savings of government due to increased revenues”.
However, the subsidy is nothing but another futile effort from the government. There is no concrete answer on the issue of unreasonable increases in oil prices and the government’s continued collection of the 12 percent value-added tax on petroleum and the oil firm’s persistent profiteering.
Compared to what the government is earning from the oil VAT and to the profits being squeezed by the oil companies from motorists and consumers, the P450 million to subsidize public transport are crumbs.
Immediate action regarding the necessity to regulate the oil price adjustments and to get rid of the Oil Deregulation Law is what the Fisher folks’ representatives are asking from the government.
The path on the oil price hike issue lies in the people’s continuing struggle to voice out their concerns and demands to the government.