Govt, private firms also burdened by fuel price increases

THE government and private businesses are also going to bear the brunt of the series of oil price hikes implemented by petroleum companies.

Mandaue Chamber of Commerce and Industry (MCCI) President Stanley Go said several business processes from packaging to logistics and deliveries will be affected by the higher prices of oil products.

On the other hand, both the provincial and city governments of Cebu are already starting to look at ways to cope with the higher price of oil, including asking for additional budget from their respective legislative bodies.

“It impacts our commodities directly and indirectly. If there is increase in oil prices, there will be increase in plastic and all consumer goods that use packaging materials like plastic. In terms of logistics, the cost will also increase because trucks need fuel to deliver goods,” Go told Cebu Daily News.

There are also businesses, he said, that use oil and bunker to run their boilers and also those that rely on fuel for electricity and generators.

Go, who is also the vice president for sales and marketing of Virginia Foods Inc., said for manufacturers like them, oil price increases have direct effect especially in their deliveries.

But despite the increase in the cost of doing business, Go said this should not immediately mean an increase in the prices of their products and goods.

“What we also do is check the competitiveness of our products versus not just local but imported products. Just because there’s an increase in oil, we automatically pass it on to our consumers? No. We have to check its impact. It may be less,” he said.

Just last Tuesday, oil companies implemented a “big time” oil price hike.

Gasoline price rose by P1.60 per liter, diesel increased by P1.15 per liter, while kerosene went up by P1 per liter. Among the companies that implemented price hikes are Pilipinas Shell, Petron Corp., PTT Philippines, Total Philippines, Chevron Philippines, and Flying V Diesel.

Additional budget

Local government units are also preparing for the effects of the oil price hike.

The Department of General Services (DGS) of the Cebu City government is now coming up with contingency plans, including asking for an additional budget for fuel for the city’s over 1,000 vehicles.

“That’s why we’re planning to have our request for additional budget be included in the second supplemental budget. We’re still computing as to how much we’re going to request because the price keeps increasing,” said DGS chief Ronald Malacora.

The city government has allocated P85 million as this year’s fuel allowance for city-owned vehicles, which range from four-wheeled mobile patrols for peace and order and heavy equipment.

“The consumption of fuel depends on the type of vehicle. Mobile patrols, which are usually four-wheeled vehicles, are usually allocated around 150 to 200 liters of fuel per month,” Malacora explained.

With the fuel price hike and without additional funds, Malacora said they plan to reduce fuel allocation of some vehicles.

“Instead, we will prioritize those needed for garbage collection, peace and order monitoring, police, and ambulances,” Malacora said.

The Provincial General Services Office (PGSO) was also adjusting their budget, especially the fuel allocation to capitol-owned vehicles.

PGSO head Jone Sepe said they had anticipated the fuel price increase because of the Tax Reform for Acceleration and Inclusion (Train) Law but they did not prepare ahead a request for additional fund and instead decided they would act based on the direct impact of the actual fuel price increases on the current allocations.

Sepe said the provincial government allocated P26 million last year for fuel needed by around 1,000 vehicles, excluding heavy equipment.

The budget, he said, was prepared and approved without consideration yet of the oil price hikes resulting from the Train Law and price increase in the world market.

He noted that the P26 million allocated for fuel last year did not even make it through until December, which means that it’s also not enough for this year.

He said they would be proposing for a supplemental budget or realignment of funds to cover for the increase in fuel cost.

Get creative

Gov. Hilario Davide III, on the other hand, said: “We cannot sacrifice our services just because of the price of the gasoline as the reason. Padayon gihapon na. Antos lang gyud ta nga taas ang presyo (We have to continue. We just have to bear with the high cost of fuel).”

Davide also urged employees to walk to nearby destinations rather than bringing their cars.

“Let’s be creative na lang … Kon dug-ol ang balay mag-hike, dili na kailangan mag dala ug sakyanan (if your house is near, go walk; no need to bring a car),” Davide said.

Amid the rising cost of fuel, transport groups in Cebu have petitioned the Land Transportation Franchising and Regulatory Board (LTFRB) 7 to increase the minimum fare for public utility jeeps (PUJs) from P7 to P12.