MERGED: All About OIL PRICE HIKE

[giddyboy]

that would be putting it lightly.

this is the consequence of the Mining Act of 1995 (RA 7942) that guarantees, among others, control of the project, even if these firms are mere partners under technical and financial agreements. the supposed "owner of the resource" does not really have much control over the whole operation.

and GMA knows this. she was the one who authored the Mining Act during Ramos' time.

of course, GMA, FVR, Erap, admin, opposition, politicians, and our economic think-tanks surely knows about this, but could there be something on these issues along the lines that we might have missed, overlooked or not stumbled upon that might get us to think in another way (not disadvantageous)? because these laws have been there for quite some time already and it seems there has been no efforts of repealing or amending these laws...

[gareb]

like the oil deregulation law, there won't be any efforts to repeal or amend these laws, since they themselves are benefiting from them while the rest of us are bearing the brunt of its effects.

political pressure? sure. the mechanisms are already at place. it only needs our support.

[giddyboy]

like the oil deregulation law, there won't be any efforts to repeal or amend these laws, since they themselves are benefiting from them while the rest of us are bearing the brunt of its effects.

political pressure? sure. the mechanisms are already at place. it only needs our support.

ok i see your point...if the opposition makes a political stand against these laws, it might boomerang to them as somehow in the future they would also become the administration, and thus they can't benefit themselves anymore.

we have party-list groups man sab unta. so does this mean that the party-list groups are also beholden to the whims of these oil companies? so if this is the case, how can we drum up support in the first place?

on another note, beside the "control" angle and the perception that some politicians will be benefiting from these supposedly flawed laws, there must be advantages of these acts of "privatization" much worth considering that we did not see vis a vis the disadvantages.

[gareb]

we have party-list groups man sab unta. so does this mean that the party-list groups are also beholden to the whims of these oil companies? so if this is the case, how can we drum up support in the first place?

if you notice, it's exactly the party-list groups (at least the independent ones) and their allied organizations, that are on the forefront of various campaigns to repeal these laws.

on another note, beside the "control" angle and the perception that some politicians will be benefiting from these supposedly flawed laws, there must be advantages of these acts of "privatization" much worth considering that we did not see vis a vis the disadvantages.

it is for us to see for ourselves what kind of advantages there are (if there really are any) that we can derive from these kinds of laws.

whatever one might say, what must be acknowledged is the fact that these laws are mere out-shoots of the IMF-WB neo-liberal triumvirate policy of privatization, deregulation, and liberalization. these policies promote big business (particularly foreign trans-national corporations) at the expense of local communities. there are volumes upon volumes of articles in the internet about these subjects, it is best that we acquaint ourselves with these terms, as well as the kind of ideological trends that are going on, for us to better understand that this phenomena is not a simple isolated incident solely within the borders of our country, nor is this simply about an "energy/oil crisis"

of course, we can dissect each and every assertion and argument in favor of these policies and/or laws that grew out from them. but for now, i need to have dinner. i'm starving.

[giddyboy]

Oil seen falling to $70/barrel this year

By Doris Dumlao
Philippine Daily Inquirer
First Posted 01:57:00 02/05/2008

http://business.inquirer.net/money/t...rrel-this-year

[brownprose]

Oil seen falling to $70/barrel this year

By Doris Dumlao
Philippine Daily Inquirer
First Posted 01:57:00 02/05/2008

http://business.inquirer.net/money/t...rrel-this-year

we also need to craft a law that provides incentives to car manufacturers that build cars that run on compressed air... the technology is available in india already. hope it comes here.

[Juan Miguel]

Here's some interesting articles from Ibon.

Oil Transnationals Will Benefit More From Tariff Cut
Written by IBON Media
Wednesday, 09 January 2008
Independent think-tank IBON Foundation said that the tariff cut on crude oil imports would mainly benefit the transnational corporations (TNCs) that dominate the local oil industry while having a negligible, if any, effect on pump prices. Experience shows that TNCs pass on costs of high tariffs to pump prices but enjoy savings when tariffs are low. Firms do not actually translate tariff reductions to lower oil prices and do not deliver on consumers’ hope for reduced prices on oil products. In fact, the first reaction of independent oil players to news of the tariff cut was to say that it was not enough to ensure lower pump prices.

The only answer to high oil prices is for government to nationalize the local oil industry, starting with the repeal of the Oil Deregulation law (Republic Act 8479). The law has only allowed TNCs to further intensify their control over the local industry even as it has resulted in near-weekly rounds of oil price hikes.

IBON reiterates the call for the lifting of the 12% value-added tax on petroleum products since it would result in a substantial reduction in pump prices of at least P4 per liter; such a call is in the spirit of the more urgent necessity of government regulation of the industry.


Gov’t Protects Big Oil Firms Over Consumers With Tariff Cut
Written by IBON Media
Wednesday, 09 January 2008
By imposing tariff cut recently, the cash-strapped Arroyo government has not only failed to address high pump prices but defaulted on its responsibility to collect revenues, all in favor of the oil companies.
Government had already imposed tariff reductions in the wake of high prices through Executive Order (EO) 527. The automatic tariff mechanism imposed under the EO may be viewed as a compromise after government removed VAT exemptions on petroleum products. The VAT on petroleum products has since become one of the largest sources of revenue for the cash-strapped Arroyo government.

Under EO 527, the current oil tariff scheme of 3% would be lowered to 2% up to 0% based on certain triggers indexed to oil prices in the world market. The expectation was that the tariff cut would soften the impact of global oil prices on the economy. Under the EO, government had reduced the tariff on oil products at least twice, but the move has not had the desired effect. Instead of addressing high oil prices, it only delayed price hikes on diesel by several days while easing the tax burdens of the oil companies.

“By choosing to remove tariffs on oil imports as a solution to high oil prices, government is protecting the interests of the oil firms at the expense of potential revenues that should be used to fund vital social services such as health and education,� said IBON executive editor Rosario Bella Guzman.

A more effective solution to the problem of high oil prices would be the lifting of VAT on oil products, she said. But the only permanent solution to high oil prices is nationalization of the local oil industry, starting with the repeal of the oil deregulation law. “The oil industry is vital to the country's economic development, and as such should be regulated by government,� said Guzman.


As Oil Price Hikes Continue : Public Faces Higher Cost Of Living, More Eroded Wages And Income
Written by IBON Media
Monday, 07 January 2008
The public is facing higher cost of living and more eroded wages and income this year as oil prices continue to spiral.
Jeepney drivers, for instance, will have to work doubly hard to earn a decent income for their families with unabated diesel price hikes. Last year alone, a jeepney driver’s daily expense for diesel increased by P147.30 as the prevailing pump price of diesel jumped by P4.91 per liter between January and November 2007. (Based on transport group Piston’s estimate that a jeepney driver consumes an average of 30 liters of diesel per day)

Diesel costs jeepney drivers around P1,125.90 per day and has to hand over between P600 to P900 (depending on the unit’s seating capacity) as daily “boundary� to the jeepney owner or operator. This means that he can only start earning for his family if he has already made P1,725.90 to P2,025.90 to cover for the diesel cost and the operator’s share.

Ordinary households, meanwhile, are spending P76.94 more for a regular LPG tank (11-kg cylinder) as the prevailing price of LPG jumped by P3.91 per liter between January and November 2007. Again, this further undermines the budgets of most Filipino families who also face higher water and electricity monthly bills as well as increased prices of basic goods.

IBON welcomes the proposal of several senators to suspend the 12-percent value added tax (VAT) on petroleum products because this will offer a temporary respite for the public. Diesel pump price, for example, could immediately go down by around P4.50 per liter without the VAT.

However, the situation calls for drastic but doable measures that are more effective and stable such as the permanent lifting of the VAT on oil products and the immediate repeal of Republic Act 8479 or the Oil Deregulation Law. (end)

IBON will present its assessment of the economic and political situation at the Yearend Birdtalk on January 14 at the UP Balay Kalinaw, Diliman, Quezon City. You are cordially invited.

[brownprose]

Tariff cuts are meaningless at the pump level - that's a given. I can only agree to remove the VAT FOR NOW until oil prices get a little stable.

Also, nationalization may not be the right fix to the rising cost of fuel as we all know oil is a globally traded commodity and is therefore dependent on the forces of supply and demand. Nationalization only forces government to bear the brunt of assuming price increases [in a form of subsidies] which for certain, will drain any cash-strapped economy like ours. Would any government or our government for that matter be willing to continuously absorb the endless rise in oil prices? And for how long?

Nationalization may be able to control fuel price spikes by arbitrarily setting price ceilings. And of course, no oil company would sell their oil products under those conditions. For a small country as ours, I don't think we have the influence or the muscle to dictate prices.

Nationalization offers no guarantee to effectively curb or thwart oil price hikes and maybe the wrong advocacy at this point in time.

Oil is already fated to become more expensive as we have already reached the terminal decline in oil production or Oil Peak or Oil Depletion. As oil becomes less and less available, we expect prices to remain where they are now or see more price surges in the coming years.

Our advocacy should be geared towards mitigating our dependence on petroleum in the short term and invest on renewable energies and alternative fuel in the long term.

[giddyboy]

Tariff cuts are meaningless at the pump level - that's a given. I can only agree to remove the VAT FOR NOW until oil prices get a little stable.

Also, nationalization may not be the right fix to the rising cost of fuel as we all know oil is a globally traded commodity and is therefore dependent on the forces of supply and demand. Nationalization only forces government to bear the brunt of assuming price increases [in a form of subsidies] which for certain, will drain any cash-strapped economy like ours. Would any government or our government for that matter be willing to continuously absorb the endless rise in oil prices? And for how long?

Nationalization may be able to control fuel price spikes by arbitrarily setting price ceilings. And of course, no oil company would sell their oil products under those conditions. For a small country as ours, I don't think we have the influence or the muscle to dictate prices.

Nationalization offers no guarantee to effectively curb or thwart oil price hikes and maybe the wrong advocacy at this point in time.

Oil is already fated to become more expensive as we have already reached the terminal decline in oil production or Oil Peak or Oil Depletion. As oil becomes less and less available, we expect prices to remain where they are now or see more price surges in the coming years.

Our advocacy should be geared towards mitigating our dependence on petroleum in the short term and invest on renewable energies and alternative fuel in the long term.

yeah, i agree with you. i can't seem to agree on Ibon foundation's suggestion to "nationalize" the oil industry. it would be like going back to Marcos' time where the gov't was found at the losing end subsidizing price increases. and we should learn from that experience... Let the law of supply and demand prevail...

While tarrif cuts offer short term solutions to the ever increasing pump prices, it will not be advantageous in the long run as tax collection will be eroded.

The only long term solutions i think to this oil problem is to study again the Oil Deregulation law and patch up the loopholes. Also, advocacy towards renewable and alternative fuel/energy should be stressed.

as of now, pump prices for gasoline has roll-backed again to around P0.50 to make it hovering at around P43/L.

[giddyboy]

hahayst...add napud 0.50 dah...unleaded gas is around 45.90/L