Thursday, April 28, 2011
AMID snowballing calls to either reduce or scrap the value added tax (VAT) on fuel to mitigate the impact of the soaring oil price, an advocacy group has backed the government's stopgap measure to help especially the transport sector.
The Foundation for Economic Freedom (FEF), an advocacy institution promoting market-friendly policy reforms, commended the government's "temporary use of targeted subsidies in favor of vulnerable groups."
President Benigno Aquino III, in issuing Executive Order 32, launched the Pantawid Pasada Program or the Public Transport Assistance Program (PTAP), as one way to extend assistance to jeepney and tricycle drivers affected by the continuous increase in the prices of petroleum products.
PTAP, with an initial funding of P450-million, will be in the form of smart cards to be given starting May 2 to drivers or operators of public utility vehicles with valid franchises, each containing a load of P1,050 that a driver may use in one filling or in a staggered basis for one month. For tricycle drivers or operators, they could claim their P150 assistance from their respective local government units.
In a statement, FEF said it also supports the Department of Energy's initiatives to vigilantly monitor oil price movements, both in the international and local markets; provide greater transparency in the computation of local petroleum product prices using alternative formulas and posting them at the DOE website for easy online access;
Requiring oil companies to explain when their price adjustments are higher than the DOE computation to prevent anti-competitive behavior; conduct dialogues with consumer and transport groups for a more open discussion of the oil price movements and other concerns; as well as hold public consultations in the course of spot inspections of gasoline stations to monitor prices.
"We also support the DOE in promoting alternative fuels and energy efficiency in its thrust to ensure energy security and sustainability," it added, as it encouraged energy stakeholders "to be guided by the tenets of the Oil Deregulation Law in fostering a truly competitive market, stimulating private investments, freeing up the government and taxpayers of costly oil subsidies and providing better services to consumers."
FEF's members include academics, former public officials and business leaders like Philip Medalla, Calixto Chikiamco, Romeo Bernardo, Roberto de Ocampo, Ernest Leung, Gerry Sicat, Arsenio Balisacan, Boo Chanco and Dante Canlas, among others. Advisers are Cesar Virata and Ramon del Rosario.
"We stand by the principle that markets working efficiently serve the best interest of consumers. The view that firms should sell products at historical acquisition cost is contrary to best practices. Enterprises will buy, trade and sell at replacement cost; insisting otherwise can lead to supply shortage which will imperil not only our oil but energy security," it explained. (CGC)