New energy-saving measures proposed

The country would survive the latest surge in world oil prices, Malacañang said yesterday, but warned that Filipinos should conserve power and fuel even as the government rushes to implement measures to reduce the country’s dependence on imported fuel.

Energy Secretary Raphael Lotilla said President Arroyo ordered the acceleration of long-term and short-term measures to cushion the impact of volatile oil prices during the joint Cabinet-National Economic and Development Authority meeting at Malacañang yesterday to allow the country to weather the oil crisis.

The President, he said, was concerned over the latest surge in oil prices. The assessment of the Cabinet was that the mitigating measures and full cooperation of the people would allow the Philippines to survive what is "hopefully a temporary situation."

"I think it is important to recognize that prices of oil all over the world are going up and this ultimately would be reflected in local pump prices. We are hoping that this is going to be a temporary phenomenon. Nevertheless, we have to prepare for any eventuality," Lotilla said in a press briefing at the Palace.

"We are facing a resurgence of the oil price crisis so that we see it necessary to accelerate all the measures we have been implementing to mitigate their impact on the local economy," he said.

The price of Dubai crude, to which the Philippines adheres, rose to its highest level of $64.70 per barrel. These measures are important so that the country is prepared in case world oil prices breach the $70-per -barrel mark.

Lotilla was quick to point out that the measures would not necessarily lead to revenue losses for the government, referring to the proposal of Consumer and Oil Price Watch chairman Raul Concepcion to use a portion of the Philippine National Oil Co. (PNOC)’s dividends in Petron Corp. to subsidize diesel users, particularly public transport groups.

"Whatever measures we are preparing might not mean a loss for the government. The (PNOC) dividends could be used in the promotion of alternative and indigenous sources of energy," he said.

Lotilla explained that the oil price crisis is being worsened by the standoff between the United States and Iran over the latter’s nuclear ambitions and the breakdown in the security situation in Nigeria, another oil-producing country.

The economic managers, however, believe that the country could weather this latest oil price surge as the government has learned from its experiences last year and has been implementing protective measures since then.

"Even though economists as well as international institutions have expressed concern about the impact of high oil prices, there is some optimism that the world economy, including the Philippine economy, would continue to be resilient and grow notwithstanding the increase in oil prices," he said, adding that the government would not change its macroeconomic assumptions for the year despite the continuing adverse developments in the world oil market.

Among the mitigating measures being fast-tracked by the government now are the use of fuels such as coco-biodiesel and ethanol. The government is looking forward to the commissioning in May of a coco-biodiesel manufacturing plant owned by Chemrez, which has a production capacity of 60 million liters per annum.

The Palace is now also prodding Congress to pass two proposed bills on bio fuels and renewable energy.

Mrs. Arroyo has ordered that idle lands in military camps be planted with jathropha plants so that its seeds can be a source of biodiesel. She is also encouraging the conversion of taxis and private vehicles to allow them to use liquefied petroleum gas (LPG) instead of gasoline.

"Oil is becoming extremely expensive. So, we have to develop and promote our own indigenous resources to reduce our dependence on imported fuels and lessen the economy’s vulnerability to the volatility of world oil prices," Lotilla said.

The government, he added, would also coordinate with oil companies to expand the current number of gasoline stations offering one-peso discounts on diesel for public utility vehicles. There are now 366 gasoline stations nationwide that offer discounts to jeepney drivers, 194 of which are located in Metro Manila. At least 49 stations in Northern Luzon, 59 in Southern Tagalog, 23 in Visayas and 41 in Mindanao are offering the same discounts.

While the government’s ethanol program is still being developed, the President also ordered the Bureau of Customs and the Bureau of Internal Revenue to systematize the importation of ethanol, which allows users to dilute their fuels to reduce gasoline consumption, he said.

Incentives would be given to car manufacturers that produce "flexible fuel vehicles" or vehicles that could run on fuels diluted with ethanol or other natural and renewable products.

Mrs. Arroyo ordered her economic managers to study whether the government can further reduce fuel tariffs from the current three percent so that local oil companies would not pass the increase on to consumers.

The government is also encouraging further oil and gas exploration in the country to reduce its dependence on imported fuel. Lotilla said that since December last year, the government had issued 16 oil and gas exploration contracts to private firms.

In the power sector, the government started implementing stringent cost-cutting measures, which included the economic dispatch of the National Power Corp. (Napocor) power plants and increased utilization of cheaper fuel alternatives like hydro-power, geothermal and natural gas. — Paolo Romero, Aurea Calica, Donnabelle Gatdula