Transport, Labor Strikes Loom Amid Threats of High Oil Hikes

Despite the Arroyo government’s constant refusal to address the lingering problem of excessive oil prices, PISTON, the country’s largest transport organization, presses the urgency for scrapping of the Oil Deregulation Law.

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World crude oil prices shot up to a record high of $55 per barrel for Dubai crude last week. New York crude oil prices jacked up to a sky-high $69 per barrel last week. Rising prices of world crude are causing alarm all over the world.

And just as everybody expected, local oil giants Shell, Caltex, Petron and even new oil players immediately took advantage of the situation and raised their pump prices by as much as 50 centavos per liter for diesel and gasoline.

The latest increase is the 14th time for this year or a total of almost 7.50 per liter increase for diesel and P4.00 for gasoline. Prices of local petroleum products are offensively high, way too much for ordinary workers and consumers to absorb. But there seems no stopping to the weekly price adjustments. Oil companies are shameless and stubborn when it comes to oil price determination, thanks to the coddling of the Gloria Macapagal-Arroyo government.

Even so many sectors are demanding the government to come up with significant solutions to unstoppable oil price hikes and impose rigid and effective price controls, Malacañang is always at the mercy of foreign oil companies.

Powerless against local oil cartel?

Clearly towing the reasoning of oil executives, Presidential Spokesperson Ignacio Bunye said Malacañang cannot do anything about excessive local pump prices since world crude oil prices are steadily on the rise in the past weeks. Instead of reprimanding oil companies with the latest increase, the Arroyo government ordered all government offices and agencies to take on energy conservation measures.

In contrast, Elmer Labog, chair of Kilusang Mayo Uno (KMU or May 1st Movement), said “Energy conservation is always good but scrapping the oil deregulation law is the only significant solution to the oil price hike crisis. Imposing back regulations on oil pricing will restrain companies like Shell, Caltex, Petron from enforcing unwarranted price adjustments.”

According to labor center KMU, President Gloria Macapagal-Arroyo must address the offensively-high prices of petroleum products or face further waves of protests from the discontent Filipino masses.

“Total collapse of the domestic economy is inevitable if the government will not do anything to restrain high oil prices. Mrs. Arroyo’s threatened presidency will eventually cave in along with the local economy if she refuses to wield political will in addressing the oil price crisis,” the labor leader said.

Possible solutions

Transport organization PISTON believes there are workable solutions to the worsening oil price dilemma. The first step, PISTON Secretary General Steve Ranjo said, is to repeal the Oil Deregulation Law.

“Doing away with the oil deregulation law is the first rational solution to the oil price hike crisis,” Ranjo said. “The problem lies with the government’s refusal to consider the junking of deregulation law, which is the main culprit in the unending oil price hikes. Repealing the deregulation law is just the first step in resolving the problems of the local oil and energy industry.”

Ranjo also said the Arroyo government must consider procurement of oil from direct sources other than giant oil corporations. “Centralized government procurement of oil products will save us from the weekly oil price hikes. Under the control of the local oil cartel, it’s as if we have no choice. But under a national centralized procurement scheme, the government can regulate and control oil prices depending on the sources. But given the current situation under Arroyo, this may not materialize. Arroyo is politically weak to effectively address the oil price crisis. Whoever will replace Arroyo must work hard to repeal the oil deregulation law.”

Workers and consumers groups are calling for price controls as well. “The government must impose effective price controls specifically on petroleum products. Consumers cannot absorb the effects of the latest oil price hike on prices of basic commodities, services and public utilities. Price rollback is another option. The government must stop tolerating the overpricing scheme of oil companies. The public needs urgent reprieve from the crippling effects of unending oil price hikes,” Labog said.

He further said they are opposed to government proposals to grant emergency powers to Arroyo. “We are not in favor of giving emergency powers to Arroyo. She may use such powers for other purposes like hastening the implementation of the Expanded Value Added Tax and the Charter Change.”

Instead of heeding the people’s demands, Malacañang (the presidential palace) is bent on maintaining the 10 percent tax on oil products once the Supreme Court decides to implement the EVAT.

Petroleum always overpriced

IBON Databank stressed that even though world crude oil prices are increasing, there are no acceptable reasons for oil companies to jack up their pump prices. In fact, oil prices are overpriced from January to August this year.

IBON stated that “Diesel has been overpriced by PhP1.14 to PhP2.12 per liter while kerosene has been overpriced by PhP1.14 to PhP2.15 per liter from January to August this year. Unleaded gasoline, on the other hand, has posted an under-pricing of one centavo to 33 centavos per liter. But looking at the high end of its prevailing pump price adjustment during the said period shows that unleaded gasoline has also been overpriced by 24 to 62 centavos per liter.

More protests ahead

High oil prices are expected to shoot up inflation rates to 8 percent for this year. But consumers are far more worried with the effects of EVAT on oil prices once the Supreme Court lifts the temporary restraining order on the tax measure.

KMU and PISTON are now preparing their ranks for another round of nationally-coordinated protests and transport strikes as soon as EVAT is implemented. Ranjo said that the effect of EVAT on oil prices will be much more disastrous than the current impact of rising world crude prices. We expect the upcoming transport strike to be more extensive given the public’s extreme disgust over the rising oil prices, worsening economic crisis and the government’s failure to address these issues all together.”

“The only option we have now is to muster collective action and launch massive protests and transport strikes against the double whammy of OPH and EVAT,” Ranjo concluded. (

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