EDITORIAL

Oil price hike incurring greater damage on wage earners and small entrepreneurs
With the increase in oil prices, solutions should be enduring and long-term, even if the crisis is in the here-and-now, according to Sen. Juan Miguel Zubiri who cited the need for the Senate to prioritize the passage of the Renewable Energy Bill and for Energy agencies and industry leaders to radically review the Philippine Energy Plan. Zubiri is right as the latest round of oil price hikes carries wide-ranging effects on the economy and will incur greater damage on ordinary wage earners and small entrepreneurs more than on other sectors. It is actually affecting those with lower incomes disparately.

The $100 per barrel forecast might be breached even before December this year which spells not only energy supply worries, according to Zubiri as spiraling oil prices push up consumer prices and inflation while it depresses the prospects of jobs generation. In deed, households deal with paying bigger electricity bills and rising prices of food and other basic goods, factories postpone expansion plans or cut inventories and front line agencies providing health, education and administrative services are hampered as they are heavily dependent on continuous supply of power.

Zubiri said the $96 per barrel oil in the New York Mercantile Exchange would likely lead to some 2.8 to 3 percent increase in consumer prices according to monitoring by leading global financial institutions like Credit Suisse, Hongkong and Shanghai Banking Corp. and the Royal Bank of Scotland. Meanwhile the Bangko Sentral ng Pilipinas said rising Dubai crude oil price which hit $85 per barrel instigated rising prices of vegetable, milk, bread, fuel and cooking gas, cement and water.

Huge remittances of overseas Filipino workers had helped the country attain a stronger peso that lowered costs on imported oil and thus helped contain inflation. However, the relief could possibly lull the country into a comfort zone that is only fleeting. Energy crises should be confronted head-on by crucial energy policies. The passage of the Renewable Energy Bill would help address rising oil cost.

Although we are the second largest producer of geothermal power in the world and source as much as 50 percent of our renewable energy from hydro power, we remain prey to volatile prices. Last year, the Philippines imported 100.8 million barrels (MMB) of oil at $ 6.8 Billion or 2.66 MMB less than 2005 import of 103.46 MMB at $5.7 Billion. Yet, we paid more for the 2006 import than the 2005 import because of higher prices. Huge potential benefits from Renewable Energy have not been reaped. Renewable energy could shield us from expensive imports and supply worries.