DEPUTY Speaker Michael Romero urged the Department of Energy to require local oil companies to raise their fuel reserve inventories to cushion the inflationary effects the heightened tensions between the United States (US) and Iran had on oil products.
“I suggest now to the Department of Energy that they order, when the need arises, the local oil companies to raise all their fuel reserve inventories to at least 30 days,” Romero said in a statement.
Romero also proposed that the government suspend, at the proper time, the excise tax on fuel reserves as well as those for other oil imports on a calibrated basis.
Socioeconomic Planning secretary and National Economic and Development Authority chief Ernesto Pernia earlier warned that the increasing tensions in the Middle East following the killing of Iran’s top military leader during a US airstrike in Baghdad could impact the Philippine economy through “likely oil price hikes in the short run and OFWs cum remittances over the longer run if tensions escalate further and persist.”
This potential surge in global oil prices due to tensions in the Middle East could also add to the burden of Filipino consumers as the last tranche of the excise tax hike under the tax reform law begins at the onset of 2020.
But Romero said alarmist speculation would only create unnecessary anxieties. He said the way to deal with the current developments in the Middle East was to stay the course in the country’s good relations and people-to-people ties with Iraq and Iran.
“While there may be historical parallels similarities between what is happening now with what was in the 1970s and 1980s, the similarities end there. The world is no longer as dependent on OPEC oil as it was in the 1970s and 1980s. In fact, world oil prices have been stable,” he said.
“The 1998 inflation spike is behind us now. Enough executive measures are also in place to manage inflation using the various tools at the disposal of the departments of Finance, Agriculture, Trade and Industry, as well as the Bangko Sentral ng Pilipinas,” he added. (GMA News)
