DOE sees no immediate need to hike PUV fares

MANILA, Philippines — The Department of Energy (DOE) said it sees no immediate need to raise transport fares as mitigating measures will be implemented to alleviate the impact of higher fuel prices due to the Tax Reform for Acceleration and Inclusion (TRAIN) law.

In a press briefing yesterday, DOE assistant secretary Leonido Pulido said an inter-agency task force, led by the Department of Finance (DOF) and Department of Budget and Management (DBM), is working on implementing rules and regulations (IRR) that will form mitigating mechanisms of the TRAIN Act.

“There’s already a draft. We’re just waiting for final inputs from other agencies,” he said.

Pulido said the DOE has also urged oil companies to help alleviate the impact of fuel price hikes on public utility vehicle (PUV) drivers and commuters through the implementation of corporate social responsibility (CSR) programs.

In the following weeks, the DOE will be executing memorandums of agreement with several oil companies to formalize such CSR programs to ease the plight of the PUV drivers.

The agency has held talks with several oil companies to provide, renew and/or to expand their discount mechanisms to PUV drivers to alleviate the impact of the imposition of the new excise tax rates.

“There are already CSR programs of various companies giving discounts to PUVs. What the (DOE) secretary has envisioned and the talks are involved in are to expand it and increase it further,” Pulido said.

Moreover, the DOE said TRAIN effect on pump prices would translate to a minimal impact on the public transportation sector, based on the correlation of historical data of petroleum prices and fare rates between 2014 and 2016 where the increase in oil prices did not have a significant impact on the prices of rice and transport fares.

Long before the onset of the TRAIN law’s implementation, the DOE, through its Oil Industry Management Bureau, acted to safeguard consumers’ welfare.

It has met with industry stakeholders for guidelines, providing advisories to the public, conducting random inspections, data gathering and reviewing the inventory, examining the paper trail, as well as issuing show-cause orders to retail outlets that raised prices before Jan. 15, the projected average period for exhaustion of old inventory.

“We implemented a lot of initiatives for the smooth implementation of TRAIN law, because we did not want consumers to be compromised. The goal is to protect everyone, especially the consumers,” DOE Secretary Alfonso Cusi said.

To validate whether the implementation of the TRAIN law was properly done, the DOE closely examined the supply chain, starting with the scrutiny of the dates of the source depot run-out vis-à-vis the implementation dates of price increases due to TRAIN.

The DOE has issued show cause orders against at least 20 oil retailers to explain in writing why they had already imposed the new excise tax rates from Jan. 8 to 12.

Out of the 20, 16 have already complied while four have been given more time to submit their explanation, Pulido said.

With its efforts to ensure that the imposition of the new excise tax rates on petroleum products under TRAIN are  fairly and responsibly implemented by all the participants, the DOE has estimated that consumers have saved around P2.64 billion for liquid petroleum fuels and P58.4 million from liquid petroleum gas (LPG).