Transport Fare Hike is Not the Solution Regulate the Oil Industry Now

Crowded jeepney in CDO, Photo courtesy of nigel_xf at FlickrAs global oil prices reach unheard of heights, breaching the US$ 145 mark a few days ago, leaders of various transport workers’ organizations from around the country belonging to the National Confederation of Transportworkers’ Union (NCTU) today assailed governmentfor its palliative measures and demanded instead a set of comprehensive pro-active response to the deepening crisis.

Realizing that the crisis is stemming from a number of causes including “peak oil”, speculation and rising demand for oil, the NCTU believes that palliative measures such as transport fare hike and price discounts, while it is helpful for transport workers, would never be sufficient. The truth is, in some areas, previous fare hikes have yet to be implemented.

The NCTU further believes that the complete freedom of oil corporations to dictate prices has to end now. One of the biggest crimes being foisted on the people today is the fact that while we are all reeling from the impacts of rising oil prices, oil companies are earning record profits. It was reported that in just the first three months of this year the five largest US oil companies made a record $36 billion in profits. In similar fashion, the subsidiaries of major oil companies in the Philippines have been doing very well. In 2007, Shell’s net profit rose from P4.12 billion to P6.36 billion, a whooping 54 per cent increase. For its part, Petron’s net profits rose by 6.3 per cent, from P6.02 billion to P6.4 billion.

Clearly, what is needed now is for government to step in, and step in big. In the short term, we demand the following:

First, Malacañang should certify as urgent a bill removing VAT from all oil products used for public transportation. This would not only lower oil prices immediately, but its impact would even cascade to lower prices of other commodities, including food.

Second, oil companies should share the burden of the rise in the price of crude. To do so, government should inspect their books and investigate their costing data to ensure that they are not earning “unreasonable profits”. Any windfall profits should them be passed on to consumers through price reduction.

Third, require all service stations around the country to provide subsidized prices to public transport vehicles, with the subsidy to be financed by money rechanneled from debt servicing.

Fourth, provide subsidies for conversion of motor vehicles to CNG, LPG and even electricity. Funds should be allocated to research and develop electric motors that are more adaptable to our country’s conditions.

All these point to the need to scrap the Oil Deregulation Law. Government needs to regulate oil prices and regain control of PETRON and use the company to bring price rises under control.

Finally, as we near the end of the “petroleum age”, it is imperative for government to develop a national energy strategy to diversify our energy sources and wean the country away from its dependency on oil.

We warn government: heed our calls or face the wrath of transport workers, together with the rest of the working people, in the coming days.

The NCTU is a confederation of transport workers’ federations and organizations from Cavite, Bulacan, Batangas, Cebu, Iloilo, Bacolod, Davao, Cotabato City, North Cotabato, Cagayan de Oro, General Santos and Zamboanga. It is an affiliate of the Alliance of Progressive Labor (APL) and of the International Transportworkers’ Federation (ITF).

Ramon Regidor, GMAFED, Cavite, (0919) 859-3631
Delfin Encabo, CAVJODAI, Cavite, (0918) 732-1433
Porcing Parreño, FIJODA, Iloilo, (0920) 320-8747
Dodong Petalcorin, NETO, Davao, (0923) 947-7032
Ali Tatak, COCITODA-NCTU CC, Cotabato City, (0927) 6010-736
Jun Pritos, MUDA, Cebu City (0906) 958-4586

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