Governments have failed to exert substantial control over the country’s energy resources because of the foreign firms’ tight grip over the sector. One result of this is the endless rounds of oil price hikes that local consumers continue to suffer from.
Although local oil firms are quick to blame high global oil prices for the hikes, exorbitant and unreasonable oil prices may be traced to the global cartel of the largest transnational corporations that manipulate international prices and domestic pump prices through transfer pricing.

Minimal Effects on Pump Prices

It should also be noted that the Biofuels Act by itself will not have any consequential impact on high and escalating local pump prices.
During the Senate deliberation on the biofuels bill, Energy Secretary Raphael Lotilla admitted that even a mandatory 10 percent biodiesel blend with regular diesel may result in a price reduction of only P0.50 ($0.01) per liter– already a small amount that may be easily offset by frequent oil price hikes under deregulation.

DoE projects that the full implementation of the 10 percent bioethanol program would displace 536 million liters of imported gasoline, which is equivalent to around P15.33 million ($333,550) in foreign exchange savings, while a five percent biodiesel blend would reduce diesel importation by 271 million liters per year, worth around P5.99 billion ($130,330,722).

These amounts become insignificant when the high volume of gasoline and diesel imports and increasing global prices are considered. Based on 2005 import figures, this would displace only some 34 percent of gasoline and 10 percent of diesel importation.

Nationalize the industry

The commanding position oil TNCs (transnational corporations) enjoy in the local oil industry enables them to dictate not only the prices of petroleum products but also the exploitation and control of the country’s oil reserves and other energy resources. And such will also happen to biofuels if government allows the nascent sector to fall under the monopoly control of transnational corporations.

Biofuels development is taking place in the context of a privatized and profit-oriented energy sector. However effective and responsible state control of the energy sector is the only way to ensure that the national interest is protected is when the development of energy resources is integrated with the thrusts and priorities of economic development. Otherwise, as is happening today, the legitimate need to develop alternative energy sources with an eye towards energy independence will be exploited as just another profit-making venture by big private interests.

Real public ownership, control and regulation of the country’s energy sector are vital for this to be truly oriented towards the needs of Filipino consumers. This includes responsible state control over resources such as biofuels. This underscores yet another challenge: to ensure that the government in place is one that is fully and genuinely accountable to the people. IBON Features/posted by(Bulatlat.com)

 Save as PDF