OPINION: GOVT KNOWS OF PLAN FOR P1 GAS PRICE HIKE
MANILA, MAY 4, 2008 (STAR) POSTSCRIPT By Federico D. Pascual Jr. - SHARP BLOW: The Arroyo administration knows in advance that the oil companies plan to raise this weekend fuel prices by a full one peso per liter, a sharp departure from the lulling spaced-out 50-centavo increases of the previous months.Knowing about it and not doing much to ease its adverse effects, the government appears supportive of the oiligarchy’s dealing a crippling blow on the population already reeling from rising prices of food and other essential items.
The one-peso increase, I assume, would have been made days ago but was deferred till after Labor Day (May 1) so as not to incense further the country’s workers already restless over their not enjoying a decent living wage.
Watch the administration go into contortions as it explains what it did and did not do about fuel prices.
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DOMINO EFFECT: The oil giants point to the steady rise in the global price of crude oil, which has broken the $100-per-barrel barrier, to justify the local one-peso jump in the pump prices of petroleum products.
The justifications will not hold back corresponding increases in transport rates and the prices of food and other commodities that are moved across considerable distances.
With the failure of regional boards to adjust wages, a hefty one-peso fuel price increase could worsen the season of discontent.
Add to the confusion the destabilization efforts of the usual forces on the left and the political opposition.
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TINDERBOX: Addressing another tinderbox threatening to catch fire, President Gloria Arroyo took steps yesterday to rein in the rising cost of electricity.
We said last Thursday in Postscript that the President could, if she wanted, stabilize — if not lower — the cost of electricity. Her reaction yesterday proved that all that was needed was political will.
Postscript cited some of the problems contributing to the rise in power rates, including the activities of a cabal in the National Power Corp. making sure that fuel, for instance, is overpriced.
Independent Power Producers (IPPs) in the Napocor system are not free to import their own fuel. They must buy it through Napocor, where a gang reportedly sees to it that fuel is overpriced.
Since fuel is a major component of generation cost (around 35 percent), overpriced coal translates to expensive power sold to captive consumers.
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EYEING MERALCO: Turning to the Manila Electric Co. (Meralco), the biggest power distributor whose franchise area covers Metro Manila and neighboring provinces, the President told her experts to:
1. Study how Meralco can be stopped from passing system loss to legitimate users. System loss refers to electricity lost to illegal connections and to resistance in the line as the power moves through it.
2. Make Meralco, where the Government Service Insurance System holds four of the 11 board seats, buy cheaper power at the Wholesale Electricity Spot Market, where electricity from various generators is traded.
The President may also want to tell her two sons and a brother-in-law, all congressmen sitting on the House committee on energy, to be guided by public interest in pushing legislation related to electricity.
While she is at it, the President should also tell her boys in the Napocor, and their padrinos, to help her realize her “legacy” before she steps down in 2010.
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MORE HIKES: The prices of crude and finished products in the global market have reached all-time high levels. The Dubai crude price, which Petron and Shell often cite, was averaging $103 a barrel in April.
Last Friday, light, sweet crude for June delivery settled at $116.32 a barrel on the New York Mercantile Exchange. (A “barrel” is around 42 US gallons or some 159 liters.) A decade ago, it cost just over $10 a barrel.
Compared to the $103 average in April, crude price has gone up 18 percent. Since local pump prices for gasoline and diesel have increased only by 9-10 percent, we can expect more price increases in the coming months.
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COSTLY IMPORTS: Oil dealers who import finished fuel report that their costs are also very high. While they do not have the same overhead as refiners Petron and Shell, their retail prices have followed the same trend as crude oil.
Imported gasoline costs around $125 per barrel while diesel can be bought at $147 a barrel! (Compare with crude’s $115 per barrel.)
While diesel costs more than gasoline in the world market, the government has used its influence to lower diesel pump price since it is used mostly by the transport sector. In effect, gasoline subsidizes diesel.
Don’t look now, but at some point, some oil firms may just opt to stop importing altogether since it is folly to sell at a loss.
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MANGIOS CLEARED: Elsewhere, the arrest warrants for architect Nestor S. Mangio and his wife Marion were recalled last April 25 by the Department of Justice. The DoJ also ordered the City Prosecutor of San Fernando, Pampanga, to throw out of the information filed against them.
Mangio, developer of the upscale Lakeshore estate in Pampanga, is also chairman of the Clark International Airport Corp. He and his wife had been charged with estafa in connection with their acquisition of the Lakeshore property.
But Mangio dismissed the accusation as “baseless and purely harassment.” The DoJ accepted his explanation that he never forged the signature of the previous owner.
“We paid him tens of millions and he voluntarily gave us his titles,” he said. “We have all the checks he received and also PNP authentication of his signatures.”
Chief News Editor: Sol Jose Vanzi
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