Lawmaker pushes for revival of oil price stabilization fund

FILE: An attendant pumps fuel into the motorcycle of a customer at a gasoline station along Visayas Avenue in Quezon City. (PNA photo by Rico H.Borja)

MANILA – A lawmaker on Monday proposed the revival of the Oil Price Stabilization Fund, which was created by the first Marcos administration in 1984, to cushion oil price spikes.

1-Pacman Party-list Rep. Mikee Romero said there is a need for a “buffer fund” to absorb the price hikes, noting that prices would remain “volatile and elevated” because of the Russia-Ukraine war and the recovery of many countries from the coronavirus disease (Covid-19) pandemic.

“We should revive the OPSF or establish a similar buffer fund, which the government could use to avoid frequent adjustments in the pump prices of oil products due to fluctuations in the cost of crude oil in the world market and in the peso-dollar exchange rate,” Romero said in a statement.

Romero suggested that the fund be sourced from higher excise taxes imposed on diesel, gasoline, cooking gas, and other oil products under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

“Since the government is not agreeable to the suggested suspension of excise taxes while the cost of crude is above USD80 per barrel, we could use part of these impositions as a price stabilization fund to provide relief to the public from increased fuel and consumer prices,” he said.

Romero expressed hope that President Ferdinand “Bongbong” Marcos Jr. would be open to this proposal since it was his father, then President Ferdinand Marcos, who created the OPSF under Presidential Decree No. 1956 issued on Oct. 10, 1984.

Under the decree, the OPSF was sourced from fuel taxes and was used “to reimburse the oil companies for cost increases on crude oil and imported petroleum products resulting from exchange rate adjustment and/or increase in world market prices of crude oil.”

The OPSF was authorized to invest in fixed-income instruments with the earnings accruing to the stabilization fund.

According to the Office of the Press Secretary (OPS), Marcos met with Department of Energy (DOE) officials last week to discuss ways that would help address the increase in oil prices.

“President Ferdinand ‘Bongbong’ Marcos Jr. met the key officials of the Department of Energy at Malacañan Palace in Manila to discuss the national government’s initiatives and programs in addressing the continuing oil price hike in the country,” the OPS said.

In June, the DOE announced its intent to ask the 19th Congress to prioritize the review of the oil price deregulation law, as it seeks to regain authority to intervene when there is a dramatic surge in prices of petroleum products for a longer period.

Marcos also bared his plan to expand the coverage of the government’s fuel subsidy program by including tricycle drivers to help the transport sector amid the increase in oil prices.

The Department of the Interior and Local Government announced that over 600,000 tricycle drivers nationwide will be receiving fuel subsidy.