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UP professor slams transport subsidy PDF Print E-mail
By TJ Burgonio
First Posted 23:31:00 06/17/2008
MANILA, Philippines -- The P1-billion subsidy for public utility vehicle owners keen on converting their diesel or gas-fed engines into ones running on cheaper fuels is just another piecemeal solution to the energy crisis, University of the Philippines Professor Walden Bello said Tuesday.

``The problem with this is, it's another kind of a reactive kind of move,'' he said at a forum, dubbed ``Consumer Crisis: The Case of Oil and Electric Power,'' at the Sulo Hotel in Quezon City.

Bello, president of the Freedom from Debt Coalition (FDC), said he was skeptical of the move because the government has so far failed to draw up a comprehensive plan to address the energy crisis.

He said the government should explain how it arrived at the figure of P1 billion, and how this fits into a “larger energy plan.''

“Until then, we would be skeptical. That might be another `give away P500 kind of thing','' he later told reporters. “What we're looking for is a comprehensive, emergency energy strategy, not piecemeal kinds of responses.''

Malacañang announced it was allocating P1 billion for operators planning to convert their fleets of jeepneys, buses and taxis so that they can run on liquefied petroleum or natural gas instead of diesel or gasoline.

The fund, to be sourced from value-added tax (VAT) collections, would be granted to the operators and drivers in the form of loans.

In his talk, Bello, who is also senior researcher of Focus on the Global South, said that the administration, like its predecessors in the post-EDSA I era, was contributing to the dismantling of the infrastructure of the energy sector.

After President Corazon Aquino dismantled the state energy complex by abolishing the Department of Energy (DoE), her successor President Fidel V. Ramos sold the government's controlling bloc of Petron shares to foreigners, he said.

Since it controlled 40 percent of the market, Petron set its price, and the big oil companies “tended to follow,'' according to him.

“Marcos was guilty of many crimes, but, as they say, we must give the devil his due. His regime did have a proactive energy strategy and an effective energy bureaucracy,” he said.

At present, the DoE could only monitor but not intervene when the big oil companies jack up pump prices, Bello said.

“All our officials can do is to exercise what economists call `moral suasion,' but we still have to find an oil company that will allow itself to be swayed by morality,'' he said.

In his talk, Bello pushed for the conversion of a significant part of the bus and jeepney fleet from gasoline and diesel to cheaper LPG (liquefied petroleum gas) and CNG (compressed natural gas) as a short-term measure.

“Incentives should also be put in place to convert private vehicles into CNG and LPG,'' he said.

Bello also proposed that the government subsidize fuel consumption of public transport drivers using funds meant for debt servicing, and designate service stations where oil at subsidized prices could be bought.

“We should keep gasoline rates fixed for a certain time, and only have them rise every month. The government should therefore pay a subsidy for the difference between the fixed rate and the market rates,'' he said.

``In a way, this is price stabilization,'' he added.

The political analyst said one strategic move to address the energy crisis was to ``radically shift'' from oil to other forms of power in transportation.

``Here priority must be placed on enlarging the electricity-run train and bus transportation system, with the necessary investments coming from resources that would otherwise go to debt service payments,'' he said.

This expansion, he stressed, should be coordinated with a more vigorous promotion of the use of vehicles for short distances, say from homes to office, or stations.

Bello proposed other short-term measures such as removing the VAT on oil and ``re-regulating'' the oil industry; buying back Petron and reconstituting the Department of Energy to bring down energy prices, diversify energy sources and manage consumption to mitigate climate change.

The goal, he said, is not to control prices but to correct the "current situation of windfall profits," and make the oil companies "share the burden of the rise in the price of crude with the consumer."
 
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