Press Release
June 3, 2008

CHIZ CALLS ON GOV'T TO SAVE ON OIL AND GAS EXPENSES

With the seemingly unabated rise of oil price in the world market, the government is urged to save on its oil and gas expenditures to cope with the present oil shock, Senator Chiz Escudero today said.

Escudero said that the government needs to work within its budget allocation for oil and gas even if the projected budget does not anymore correspond to the present oil price in the international market.

The senator added that gas, oil and lubricants (GOL) is a component of the P37 billion proposed budget for supplies and materials for fiscal year 2008. Of this amount, around P2.2 billion or 6 percent of the total budget for supplies and materials is allocated for oil and gas.

In the macroeconomic assumptions for 2008 by the National Economic Development Authority (NEDA) and the Bangko Sentral ng Pilipinas (BSP), Dubai Oil Price was projected at $62-$70 per barrel. However, oil is already trading at $127-$130 per barrel barely halfway through 2008.

Escudero said tightening of belt is the call of the day as there is no more room to wiggle in for supplemental budget for oil and gas. "The government needs to cushion the impact of the oil price shock without adding burden to our national budget by way of cost-saving measures like in the use of vehicles by different government agencies".

However, Escudero put a caveat on the use of police vehicles and ambulance which he said should always be maintained in good running condition and should always be filled with petroleum to enable these vital instruments to be readily available in maintaining peace and order and responding to emergencies.

In the latest data culled from the Commission on Audit (COA) Annual Financial Report for 2006, the combined annual gas bills of the national government and the local government units was at P2.8 billion or P20.9 million per day when unleaded gas was at P36.74 per liter in March 2006.

Escudero is specifically calling on the AFP to save on gas and oil as it came out as the top spender for petroleum in 2006 with a P831 million expense. Other heavy users of gas in 2006 were DILG (P631 million), DOTC (P173.4 million), DA (P151.5 million), DPWH (P151.3 million), State Universities and Colleges (P127 million), DENR (P103 million), DAR (P88.2 million), DOH (64 million), and DepEd (P60 million).

Registered government cars by end of 2006 was 75, 803. The PNP has 8,000 various "vehicles on paper", the Philippine Air Force, as reported to the House Appropriation Committee in 2005 has: 381 various aircraft inventory, of which 239 in "possession", 122 in storage, 117 "presently maintained", 63 "full mission capable", 19 were "part mission capable" and 35 "out".

Escudero said the AFP should only include in their budget for petroleum those vehicles that are working and exclude those that are already in no running condition.

"New oil prices will come on line and the price shock will be felt by everyone, the government should be the first to exercise unnecessary drives, for how could it call on the people to save on gas consumption if it does not walk its talk?."

As this developed, Escudero continued to call for the intensive review of the oil deregulation law to revalidate its sufficiency and effectivity because it may no longer be valid in the light of prevailing circumstances relative to its implementation. He wanted to go back to the regulated industry or semi-regulated industry to address the impact of any considerable increases in oil prices and redefine the concepts of cartelization and predatory pricing as provided for in Section 11 of the Oil Deregulation Law to make them more apt to the policy of deregulation.

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