Oil price hike: Have said a lot and done nothing

There have been many thoughts on how to solve the crisis we are all in. So far, for food crisis, the government went for temporary solutions, like dole-outs and subsidies through the National Food Authority. For last year’s oil crisis, the government claimed they’ve provided soft loans to public utility owners for their engines’ conversions from gasoline to LPG. On the current oil price hikes, the government has done nothing.

Opposing groups have diverse thoughts as well. Pundits’ ideas, for instance, ran from conservation of what we have to opting for more alternative sources. The entire population’s views are very diverse too. Though not loudly ventilated, the silent majority is going for more offshore drillings while the noisy minority adamantly blocks it. Government leaders can’t seem to agree too. While some senators are pushing for the abolition of VAT on oil, the executive department holds on to it.

These food and oil crises should be seriously addressed and not be treated with kid gloves. In tackling these concerns, let us go through its roots with relevant facts and figures, and not attempt to solve them based purely on sheer guts and wild emotions. 

First and foremost, we must all understand that prices are skyrocketing as a result of the interaction between supply and demand. It simply means that locally there are shortages in the supply of food and oil. Therefore, for both products, it’s a seller’s market. This is a situation where suppliers can command the price. Consequently, the hapless buyers will suffer in the receiving end. In this present situation, our country isn’t a seller but a buyer. Thus, we too are in the receiving end of the bargain.

From these facts, it is palpable that any suggestions that do not lead to increases in oil or food production or reduce dependence on them are not real solutions but just temporary cushions. Therefore, domestic drilling and alternative energy can be considered permanent solutions while abolition of VAT on oil is largely temporary and may not even be at all felt by the less privileged in our society.

In trying to come up with our permanent solutions, let us examine the more developed countries way of solving theirs. Take for instance the USA’s approaches. Though, just initiated by the Republican lawmakers, in the latest survey, majority of the Americans are supporting the expansion of the country’s domestic drilling prevalently in Alaska’s Arctic National Wildlife Refuge and off the East and West coasts.  

Experts estimated that these areas could add between 1 and 3 million barrels per day. This is quite significant already considering that the USA produces only 5 million barrels a day from its existing wells. Even the democrats, who for years have been adamantly protecting their untapped oil reserves have softened their stand and are now open to expanding their domestic drilling. No less than US President Barack Obama is shifting towards such direction. Their main objective is less dependence on foreign oil.

Like the USA, we are also blessed with our own untapped oil reserves. Foreign investors are knocking at our doors as far as oil exploration is concern. While the Japanese firm that explored in Pinamungajan left (definitely, not out of the absence of oil reserve) because of the constant nuisances from a few ideologues, the Australians who were interested in Argao's seawaters just disappeared. 

Honestly, as far as programs in augmenting our oil supply is concern, we've already done so much. Well, not in supporting them but burying all initiatives. So far, we’ve sent the Japanese exploring in Pinamungajan packing, allegedly, for environmental concerns. Likewise, the same group of seemingly concerned citizens kicked the butts of the Australians before they can even unpack their wares for the possible exploration in the seawaters off Argao, well, for the same and more often repeated line, environmental concerns.   In all these drama, the peace loving and the real concerned citizens are just wondering. Are these Americans who opt for more drilling in their untapped oil reserves less concerned about the environment than us? 

On the other hand, in our earnest desire of augmenting domestic oil production, we must also pursue conservation initiatives. Unlike other countries like the USA that manufacture cars, we can’t really stipulate fuel efficiency standards. For instance, in the USA, car manufacturers are mandated to raise fuel efficiency standard from 25 to 35 miles per gallon by 2020. In us, as importers of used vehicles, we can only hope for the limiting of its importation.

However, though we can’t replicate other progressive countries’ fuel efficiency regulations, we can explore other ways of conserving it. Stipulating speed limits is one of them. Speed limits do not only improve safety it also stretches mileage per liter of gasoline. Or in a more practical way, why not stop one's engine when in a traffic jam or in a junction where the red light is still on. Sometimes, red lights turn green in a couple minutes. If we switch off our cars' or jeepneys' engines while waiting for our turn, then collectively, we could save thousands of liters per day.

Alternative sources, like bio-fuel or geothermal energy, can also be considered. While bio-fuel was arguably pinpointed as one of the culprits of the food shortages, geothermal energy maybe largely considered instead. If power plants can shift to this energy, then more labor generating factories maybe operated without necessarily increasing oil consumption.  

Lastly, though the scrapping of VAT on oil is a popular alternative, this does not necessarily ease the pain we are in right now. The poorest of the poor (the people we are trying to really take care much about) do not travel that much, and if they do, they go by foot. Also, everything they put in their plates for their families' meals are practically exempt from VAT. 

What this government should do instead, is use VAT on oil to build more farm-to-market roads to augment food production and cut usurious middlemen from the entire process. That way, farmers earn more and shall be encouraged to produce more, thus, consequently help solve our lingering food shortages. 

Indeed, there are a lot of differing opinions. These are differing opinions that could mean diverse preferences; diverse preferences that demand tough choices; and tough choices that could even lead to personal animosities and wild altercations. In all these exercises, however, we hope that our democratic upbringing prevails and we will wholeheartedly accept the pill that tastes bitter in the short run but heals us in the long run. 

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