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IT is hard to write about oil prices nowadays because
most probably by this time this coming weekend another price hike
would have driven prices even higher. Due to the ever-increasing
price of gas and diesel, the Land Transportation Franchising and
Regulatory Bureau, with the concurrence of the National Economic
Development Authority, granted a fare increase of one peso for the
first four kilometers of jeepney routes.
Jeepney fares now starts at P8.50
for the first four kilometers plus an additional P0.25 for the
succeeding kilometers. This belated relief for drivers is easy to
understand, as it takes only simple mathematics to justify a jeepney
driver’s demand for a fare increase in the light of the high costs
of fuel.
Interviewing a driver plying a
short Metro route, one obtains these basic facts: on a day, they
consume an average 30 liters of diesel, pay an average of P700 for
boundary, and loads an average of 300 passengers in about nine round
trips.
Here is the math.
At a staggering P54 to P55 per
liter of diesel, P1635 (30 liters x P54.50/liter) is needed on the
average for fuel. With 300 passengers, their gross daily income
would be P2,250 (at P7.50/passenger x 300 passengers). Subtracting
fuel costs and boundary fees, jeepney drivers either have to shell
out some spare cash (if they have any) or put in extra trips since
they will be left with negative P85 pesos on the average at the
current rates. Even with fares at P8.50, a driver will gross at
P2,400 which leaves him only P215 to take home.
This P215 is way below the daily
living wage computed at P894 by the National Wages and Productivity
Board for a family of six (for June 2008/NCR). To reach the living
wage requirement, one can compute that the minimum fare should be
raised to P10.75, which would in turn hit commuters hard. Any oil
price increase this weekend, or in the upcoming weeks and months,
would increase these estimates further.
CBCP’s call
The Catholic Bishops Conference
of the Philippines has recently called on the government to review
the 12-percent expanded value-added tax and oil deregulation law.
The prelates stressed that instead of giving doles to the poor, the
government should focus on providing long-lasting solutions based on
economic reforms.
The scrapping of 12-percent
value-added tax (VAT) on petroleum products would give drivers
immediate relief. Diesel pump price could immediately go down by
around P6.53 per liter without the VAT. Gasoline products will go
down by P7.26 and an 11-kg tank of LPG by P97. We can calculate that
the removal of the VAT would give an immediate P196 increase in the
daily earnings of a jeepney driver.
The example above underlines the
reality that fare increases are not the real answer to ever
increasing oil prices. But on the other hand, it will also be
unreasonable to make the drivers shoulder the burden for rising oil
prices fully. Stop-gap measures such as discounts are selective; and
a reduction on importation costs of parts would not make an impact
on the take home income of drivers.
Aside from being a well-known
symbol of the Philippines, jeepneys reflect the level of industrial
development that we have reached. We lack a reliable commuting
system, such as an affordable network of bus and trains. We thus
rely on these second- hand vehicles converted to public
transportation as our main means of movement inland. Improving the
plight of jeepney drivers would thus go a long way for their
families and to all.
Control price of oil
Government should control the
price of oil. It is the oil deregulation law (R.A. 8479) that
enables oil companies to raise prices without government
intervention and allows companies to pass on their under recoveries
to the buying public. Congress should pass immediately the bills
filed by progressive party lists: House Bill (HB) 3458 which seeks
to remove the 12 percent VAT on oil products, HB 3433 to repeal the
RVAT and HB 1724 to repeal the Oil Deregulation Law.
To buffet our economy from
external oil increases, we should also seek ways to centralize our
procurement and buy direct from countries without transfer pricing
and add-on costs. Long-term contracts with friendly countries could
have shielded us from the increases due to speculation in the world
market. We should also maximize our indigenous petroleum and natural
gas reserves for our own use by investing in extraction and
downstream petro industries. Our own energy resources should be used
fully by our people and not be put on sale to foreign interests.
[Dr. Giovanni Tapang is a
physicist and chairperson of Agham. He can be reached at prom.bound@gmail.com.
Giovanni A. Tapang, Ph.D. gtapang@nip.upd.edu.ph National
Institute of Physics http://www.nip.upd.edu.ph/ipl University of the
Philippines Diliman (M)+639286974804 (O)+6324344239]
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