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People of the Philippines, it is time to take matters of rising oil prices into our own hands.

September 6, 2011

The Department of Energy (DOE) is doing very poorly on this issue.  I don’t think anyone from that department—and much less the large oil companies, have any real intent to bring fuel prices down or devise a means for keeping it affordable for the welfare of the people.

Take a look at what DOE emphasized in a press release last August 17, 2011:

The Department of Energy (DOE) would like to reiterate that the Philippines is using Mean of Platts Singapore (MOPS) as the benchmark for local fuel products which, has a different price movement compared to that of the West Texas Interchange (WTI) crude.

“International prices are no longer behaving simultaneously. Realities in a certain geography is causing a divulgence of prices.” Energy Secretary Jose Rene D. Almendras said.

MOPS is the daily average of all trading transactions of diesel and gasoline as assessed and summarized by Standard and Poor’s Platts, a Singapore-based market wire service.

They didn’t even care to clarify how MOPS works or even what the formula of the Energy Regulatory Board (ERB) is whose constituent element is the average weekly MOPS price for unleaded gasoline and automotive diesel oil as the benchmark for finished petroleum products in Asia.  What’s interesting is that the DOE has been using the ERB formula since 1998 as a barometer to determine propriety of weekly oil price increases in the Philippines… how sure are they that their formula isn’t already obsolete?  Or how sure are we that the formula they devised is still fair?  DOE is using ERB as part of its efforts to ensure transparency in oil prices in the Philippines, but they sure aren’t transparent about this one.

For everyone’s benefit, here in a nutshell is MOPS (according to Wikipedia):

Mean of Platts Singapore or MOPS is a measure of fuel oil pricing in Singapore. It refers to the mean price of oil traded through Singapore as per the data from Platts, a commodity information and trading company.

MOPS typically will have a value referring to its premium over ex-wharf bunker fuel prices. When demand is low and the supply is good, premiums will be low or negative. Conversely, when demand is high and the supply is tight, premiums will be high or positive.

So we have a very basic idea of what MOPS is… what we don’t know is how are it is being used in the ERB formula.  If DOE or ERB want to be transparent, and if they want to appease us a little bit by showing they are truly fair about their pricing, then they should educate us, the People, and help us understand these obscure or ambiguous computations and pricing system.  We are tired of typical excuses such as inflation, or that prices went up everywhere so we’re going up, too!  …But heck, if prices went down everywhere, we don’t go down the same as they do or the oil companies here roll back very little!  So come on, who are you trying to fool?!

DOE went on saying there are only two refiners in the country, and they are importing not just crude oil but finished products as well to meet their own demand.  All the other players in the downstream oil industry, who import finished products, use MOPS as benchmark for their pricing. Dubai price, on the other hand, is a benchmark used by different Asian countries for crude oil.  I suppose they were explaining why MOPS is our basis, and perhaps we really don’t have any choice, but I want to understand what this ERB formula is about that it seems so unrealistic and inconsiderate of hard times in the Philippines.  Do they really think we were  satisfied when they said:

To date, the movement of the prices at the pump is consistent with the ERB formula.  Rest assured, the DOE has been closely monitoring actual oil price movements, both in the international and domestic market, to prevent unreasonable adjustments and abuses.

It sure doesn’t appear like they’re fulfilling their last statement.  I don’t see them defend the people when those bloodsuckers decide to raise prices come midnight following the news about it.  It’s also unfair how they drastically jack up the prices immediately—just upon speculation of a price hike across the globe they implement the increase over here, no reservations!  But when everywhere else (outside the Philippines) prices have rolled back, over here it would take about a week or two before a rollback is implemented—and the rollback is but pennies!  In other words for every Php2.00 they increase, they only roll back 0.15 centsThat’s a very rough estimate but it might actually be worse than that!

I don’t know what makes these people think they can continue giving excuses as if it’s alright for them to unjustly charge people for their poor management and whatever racket their pulling behind the scenes.  I’m not just talking DOE or ERB, but all other big oil companies in this country: Petron, Shell and Caltex.  The racket doesn’t end in unfair pricing, but I’ve noticed lately that my car wants to die when it’s idle and running on a silver grade gasoline, or there isn’t enough power when I step on the gas—I could tell my car was having a hard time on silver or plain unleaded gasoline.  This was never the case before, and now I’m forced to buy gold or the highest grade of gasoline in order for my car to run properly!  These businessmen are inhumane going so low as to force people to spend more, or else they’ll break you car!  DOE, can you now say you are preventing unreasonable adjustments and abuses?  Do something about this!

And going back to importing, what about the decision to import oil by one of our oil refiners last September 2010?  An official of one of the refineries said that their company has problems affecting the viability of its operation in the country, or that “It is having economic difficulties…  If it’s cheaper [to import petroleum products], then it’s going to be its business decision.” —Well, maybe for them it’s cheaper, but it doesn’t take an expert to understand that i the long run it will be more expensive for the People.  There probably wouldn’t have been a need to import oil had they paid their tax obligations (amounting to billions) on time!  But this kind of mismanagement prohibited them from being able to expand refineries or comply to safety and environmental regulations.  I don’t know now… Have they resolved these issues?  Or is this the other reason why prices remain high no matter what?  The People—on top of paying for more expensive, lower-grade, imported oil, end up paying for company taxes tucked in the retail price!  Have we had enough yet?

Apparently not.  As if to say we should never expect oil prices to get better, Energy Secretary Jose Rene Almendra gives us this bleak future:

“We have to keep in mind that oil is a finite source and is expected to become more expensive as it nears depletion, which is not far from happening.” Sec. Almendras said.

In line with this, the DOE intensifies its advocacy of energy efficiency and conservation, as well as the promotion of the use alternative fuels for transportation—along with other agencies and stakeholders, the department is finalizing the Alternative Fuels Roadmap, the flagship program designed to diversify the fuel mix of the transport sector.

Under the Roadmap, the DOE is set to convert 200 diesel-run public utility buses to use compressed natural gas; convert diesel-run public utility jeepneys to use liquefied petroleum gas; and continue to implement the use of the 10-percent ethanol blend on gasoline pursuant to the Biofuels Act of 2006.

This is an anemic roadmap to say the least.  It just goes to show that  NOTHING of what is being done today will change.  The use of Compressed Natural Gas (CNG) for buses is a good thing, and perhaps the only good thing in this roadmap.  But I wonder how they will roll this out for privately owned transport buses and how much planning they’ve really put into this to roll it out as scheduled?  Based on the revised Philippine Energy Plan (2005-2014), the government had planned for200 CNG buses to operate along the Batangas-Manila route in 2006 expanding to 2,000 CNG buses on the road, supported by 10 CNG refueling stations by 2007.  It was originally intended that the initial 200 CNG buses would be fuelled by Pilipinas Shell Petroleum Corp (PSPC); however the fleet size has reached just 60 units, of which only 17 are reportedly fuelled by PSPC.  It’s now 2011,  and it seems we are still far from reaching this goal.  How much further to include the Visayas by 2015?

The next in their roadmap is a stupid idea, which is to stick with using Liquefied Petroleum Gas (LPG).  It is dangerous, unhealthy and it competes with LPG for cooking, which is why its become more expensive to use LPG-powered stoves.  It has affected household expenses, and now wouldn’t you know, LPG prices have gone up for motor vehicles anyway!  I hear taxi drivers running on LPG complaining it isn’t much different from diesel nowadays, and with that a combination of inefficient engine design, expenses of maintenance and the scarcity of LPG stations rolled in the mix.

And finally, the newest excuse of oil companies I recently heard on the news, the continued use of ten percent blend of Ethanol has affected the increase of oil prices (and even food prices) because the price of Ethanol has gone up!  So why in the world must we continue to use it?

In short, I don’t see any real solution in the roadmap of DOE.  It’s empty, there’s no real foresight, it will not resolve anything.  You know what would have been a real solution but happens to be impossible at this point?  Investing on Dingle’s Water Car or any similar invention.  But of course there are some officials in government who would not (and will not) support an invention that would kill the business of our oil companies… no, no, no… Not while some of them have vested interests in oil dependency (like a kickback or something—we can’t rule out corruption in all this!).

Of course, I can’t say all officials are corrupt!  Because our new President is gung ho on fighting corruption (sometimes), I think the more honest public officials are stepping up to finally do what is right.  I’d like to take this time to thank the few Senators who are at least trying to question oil companies who raise fuel prices upon speculation only of a price adjustment using MOPS.  You are in a better position to do that, and I hope you won’t stop standing up for the little people.  Thank you, thank you, thank you.

Although, I have this to say to our President:  If you really care about giving back to the people, then remove the VAT on fuel prices for the consumers.  In fact, don’t pursue placing taxes on tolls!  Just take away the pork barrels from hungry pigs–er, congressmen who don’t have any real projects to implement anyway.  And confiscate the money stolen by corrupt officials in the past or demand that they return every penny of it… hold all their assets if necessary, and put them in jail throughout the duration of their trials.  If they don’t return what they stole they should get the death penalty or be jailed for three lifetimes, and their families must never be allowed into public office forever.  The scale of their corruption is a grave matter, millions of lives are destroyed because of it, and for that the penalties MUST BE SEVERE.  That said, in their deaths they do not belong in the Libingan ng mga Bayani, even if their sins are forgotten by latter generations.

I’m sorry, I just had to let that out.

Now going back to our topic on oil, to the rest of the officials who may have vested interests in the oil price hike schemes, we have no control over your stupid and selfish decisions.  The People can only control how we react to this madness by changing the way we drive, or switch to using induction cookers, or take public transportation instead of bringing your car through traffic, or walking to work, and sometimes, not eating the proper meals.  We’re doing every practical thing we can to save and compensate for the expenses brought about by transportation.  But now, there’s an even better idea with much greater impact, I hope.

Like many long dark tunnels there is a light at the end of it—or, I think it’s a twinkle!  In a recent news, a pro-administration legislator has pushed for the adoption of 10-hour, four-day or 10/4 workweek in both public and private sectors, which would not only save on costs but also enable workers to have extended weekends with their families.  “It will still be 40 hours a week, but the work schedule will run from Monday to Thursday instead of until Friday. Public- and private-sector employees will put in two additional hours of work daily,” Liberal Party Rep. Winston Castelo of Quezon City said.  Castelo said the 10/4 formula could mean weekly savings of at least 20% in work expenses. He added that it could also serve as a “poverty alleviation” program by itself for cash-strapped workers.  Now isn’t that practical thinking?  I’m glad there are still some public officials left who use their heads and try to think outside the box—well, it’s not really a new idea, but to consider that as a nationwide movement is good enough!

I don’t know about you, but I’d like to support anyone or any movement that imposes a practical solution to lessening our use of oil products.  I think lessening our travel time to work, if everyone complies, will have a great impact in oil consumption, which I hope is felt by the big bad oil companies and ERB and DOE.  But People, we have to do our parts and stay at home rather than go out on the said extra rest day!  Next, I’d like to propose that everyone take lessening consumption of electricity seriously (after all, NAPOCOR uses a lot of oil-powered generators to give us electricity).  If we can, let’s do this:

  1. Favor induction cookers over electric stoves or stoves using LPG.  Induction cookers cook faster than electric stoves (equals lesser electricity being used), meanwhile we also want to lessen demand on LPG.
  2. Let’s try to find a way to make use of solar-powered anythings for households… now I know at this point this is impossible.  Solar panels are very expensive (in the Philippines) including its installation, and what appliance or vehicle is there that is solar powered which we could use today?  All that I know of is a water-proof solar-powered watch (charging itself using solar energy) that can last up to 5 years.  Anyways, my point here is, if it ever reaches the market and becomes more affordable, let’s find a way to patronize it and implement it in our households right away.  Given that it may take (maybe) decades from now for that to be a reality…
  3. Let’s be stewards of our own homes and save electricity by turning off lights, fans, television sets, PCs or any other appliance we have at home while they are not in use.  And as much as we can, make use of appliances that need at least 25% less electricity in order to run.
  4. Get a hobby.  Get into sports.  Exercise.  Do gardening.  Or read books.  Do anything to keep yourself occupied that doesn’t require batteries or electricity or fuel.  I’m not saying this is what we should only do, but do more of these kinds of activities.
  5. Anything else anyone cares to contribute???

If we look at the education angle, schools and universities should also encourage and reward the sustainable inventions of our young minds!  They should propose such inventions to the government and ask for funding to further develop them, and they should give the inventors due credit.  And if the government can’t help, then plea to the community for support!  Get people involved by motivating them to help fund such projects.  Communities should be open-minded about this because if it succeeds, it’s also good for the image of the community!  But if even the community can’t help, then schools must invest on their students and their inventions if they are serious about making a contribution to society and our nation as a whole.

Meanwhile, other companies and business should look into telecommuting.  It may not be for all kinds of positions, but there are quite a number of positions where telecommuting benefits both the business and the employees.  For instance, unless it’s for brainstorming or client meetings, a developer or a writer does not need to go to the office to do their work.  All they need is an internet connection and a computer at home.  They submit their work online or can upload files through FTP… this will mean companies don’t need to spend for so much office space, that’s also less electricity used, and they can justify reasonable salaries for employees who don’t need to spend on transportation or eating out.  An arrangement with the company paying for the employee’s broadband and perhaps supplying a laptop if the employee has no PC is less expensive than our traditional setup of maintaining an office.  Again, not all positions can apply this setup, but overall the impact of millions of IT professionals or writers in the Philippines who don’t need to travel a lot will lessen the demand for oil!

That’s our ultimate goal as a nation:  Lessen our dependency on oil.  That’s the only way to fight back against oil companies who abuse their power.  They have to feel the loss of demand.  We can’t give them that excuse to increase oil prices forever.  And we can’t depend on DOE or ERB to get the job done.  We don’t have to be helpless in this war if we, the People, only work together.

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