THE government could suspend the Biofuels Law to cushion the public from soaring fuel prices, the Energy department said, following proposals made to the Cabinet to raise the fuel subsidy for public transport drivers and to suspend the 7% tariff on thermal coal.
“(The suspension of the Biofuels Law) is a possibility if the problem escalates,” Energy Secretary Alfonso G. Cusi said in a virtual briefing on Tuesday.
Republic Act 9637, or the Biofuels Act of 2006, requires fuel companies to offer biofuel blends, the proportions of which are currently set at 10% ethanol for gasoline and 5% biofuel for diesel. Ethanol is made from sugar while the feedstock for biodiesel is coconut oil.
During Typhoon Odette last year, the DoE suspended the biofuels law, specifically the biofuel blend requirement for gasoline and diesel in provinces hit by the typhoon, in order to ensure adequate supplies are delivered to the typhoon zone.
“The DoE is prepared, but there are other sectors that we need to look at in their entirety,” Mr. Cusi said.
Late Monday, the DoE proposed to President Rodrigo R. Duterte and the rest of the Cabinet an increase subsidy to the public transport sector, pending a resolution on proposals to suspend the excise tax on fuel.
According to Mr. Cusi, the DoE proposed that the Pantawid Pasada program, which will be directly given to public utility vehicle drivers, be increased to P5 billion, and the P500-million fuel subsidy to farmers and fisherfolk be doubled to P1.1 billion.
For coal, Mr. Cusi said he asked Mr. Duterte to suspend the 7% tariff under the ASEAN-India Free Trade Agreement to bring down the cost of coal, a major source of fuel for power plants.
“We’re asking for an executive order from the President so we can suspend that,” he said.
The DoE convened with the Philippine Independent Power Producers Association (PIPPA) last week in which the industry was advised to expect higher power rates in the upcoming months.
PIPPA members include SMC Global Power Holdings Corp.; Aboitiz Power Corp.; Semirara Mining and Power Corp.; First Gen Corp.; Quezon Power Philippines Ltd. Co.; AC Energy Corp.; TeaM Energy Corp.; Filinvest Development Corp.; and Meralco PowerGen Corp.
Fuel prices rose for a 10th executive week on Tuesday, in increments of P3.60 per liter for gasoline, P5.85 for diesel, and P4.10 for kerosene.
Since the start of the year gasoline, diesel, and kerosene prices have risen by P13.25, P17.50, and P14.40 per liter, respectively. — Marielle C. Lucenio
