BIZ COLUMN: THE SILVER LINING BEHIND HIGH OIL PRICES
MANILA, JULY 29, 2008 (STAR) TAKIN’ CARE OF BUSINESS By Babe Romualdez - I’m sure everybody either listened and made comments – good or bad – or totally did not listen to GMA’s eighth State of the Nation Address (SONA). But now it’s time for this 14th Congress to pay attention to the continuing problem of oil prices and the corresponding price spikes in rice, food and other commodities. Even if gasoline prices showed a sharp decline in the last two weeks, and regardless of the prediction by the president of the Organization of Petroleum Exporting Countries (OPEC) that prices will lower to $70 per barrel if the dollar strengthens and the Iranian nuclear crisis cools down, the problem is not about to go away anytime soon.
The demand for crude oil from China, India, Russia and Middle Eastern countries continues to skyrocket as they use up 20.67 million barrels per day. Analysts are predicting that for the first time this year, they will consume more crude oil than the United States, with China poised to become the world’s biggest oil importer with its demand expanding at an average of 11 percent every year. Together with India, the increasing demand for fossil fuels from these two countries will obviously have a huge global impact, exacerbated by the fact that over the last two years, oil production has stagnated by 85 million barrels per day.
While there is a renewed drive in the search for alternative and renewable sources of energy, the worst is yet to come, as countries continue to feel the pinch with the poor once again caught in the middle as they try to cope with surging costs of food and other basic commodities. The Philippines is one of the countries most vulnerable to oil price shocks because of its heavy dependence on imported fossil fuel, and government must have more concrete and long-term solutions other than just relying on biofuels to assure the country’s energy security. Hopefully though, this present Congress will focus less on politicking and concentrate more on pressing legislation like repealing the Oil Deregulation Law. The 14th Congress has a lot of youthful legislators with innovative and forward-looking ideas so it’s not unlikely that they will see the wisdom of changing legislation that are no longer appropriate for the demand of the times.
Various sectors – from the Church to students to businessmen and naturally the marginalized poor – are urging for the repeal of the Oil Deregulation Law since it’s obvious that it has not encouraged competitive pricing at all particularly from the giant players. This is something that people have been calling for as early as 2004 when surging oil prices have not yet reached astronomical proportions. Many people are already lambasting the Department of Energy for being “inutile” in the face of the crisis since it can not even compel oil players to explain their basis for price increases.
One good thing – if one can call it that – which has come out of the incessant oil price hikes is the easing of traffic especially along major thoroughfares like EDSA. Vehicular congestion costs about $4.6 billion every year – which is about 4.6 percent of GDP. At any rate, the constricting hikes are driving Filipinos, rich and poor alike, to drastically change their lifestyles. For instance, car owners are chucking gas-guzzling SUVs for more fuel efficient vehicles. More people are beginning to rely on public transportation to save up on fuel costs. I have pointed this out before, and I’m saying this again – government has to develop more efficient mass transport systems by expanding the existing MRT/LRT networks and sprucing up the ramshackle Philippine National Railway (PNR) trains for starters. It’s also encouraging to note that more people are utilizing the Pasig River ferry boats which traverse the 27-kilometer stretch of the Pasig River to Laguna de Bay at very affordable fares of P25 to P45.
The e-jeeps or electronic jeeps are also useful alternatives. Aside from lessening pollution, these battery-powered vehicles can save drivers more than P50 per day on diesel expenses. Makati started using the e-jeeps late last year and the LTO should really work fast on granting the franchise of these e-jeeps so that the routes could be expanded and people would be able to use them for private purposes as well.
Perhaps government should start looking into reports that some Filipino inventors have developed a fuel additive that gets more mileage and improves engine performance. The additive is said to be a mixture of organic oils that help reduce car maintenance costs and is safe to use on catalytic converters, oxygen sensors, oxygenated gas and ethanol-blended gasoline. Filipinos are very creative and in times of crisis, that’s when you see their resourcefulness coming to the fore, buoyed up by their unceasing belief that behind every cloud is a silver lining.
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With the resumption of Congress and legislators trying to outshine each other as they paraded in their dazzling outfits during the SONA, people are beginning to pay a closer look on the behavior of our country’s solons. In Negros Oriental for instance, sources disclosed that a local barangay official has accused 1st District representative Jocelyn Limkaichong of “illegal and unethical behavior” for issuing press releases in various newspapers regarding a case pending before the Supreme Court. Apparently, the Comelec has earlier disqualified Limkaichong for being a Chinese citizen, and has denied en banc her motion for reconsideration. According to the complainant, Limkaichong failed to appeal on time the Comelec decision before the Supreme Court, thus making her disqualification final and executory.
The barangay official also accused Limkaichong of violating the rule on sub judice when she caused the publication of the details of the memorandum she filed before the Supreme Court in several newspapers – in an obvious attempt to sway public opinion to her side. If true, then this is another disappointing example where those who are supposed to craft laws are the very same ones who violate them.
Chief News Editor: Sol Jose Vanzi
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