It is hard to write about oil prices nowadays because most probably by this time this coming weekend another price hike would have driven prices even higher. Due to the ever increasing price of gas and diesel, the Land Transportation Franchising and Regulatory Bureau, with the concurrence of the National Economic Development Authority, granted a fare increase of one peso for the first four kilometers of jeepney routes.
 
Jeepney fares now starts at P8.50 for the first four kilometers plus an additional P0.25 for the succeeding kilometers. This belated relief for drivers is easy to understand, as it takes only simple mathematics to justify a jeepney driver’s demand for a fare increase in the light of the high costs of fuel.
 
Interviewing a driver plying a short Metro route, one obtains these basic facts: on a day, they consume an average 30 liters of diesel, pay an average of P700 for boundary, and loads an average of 300 passengers in about nine round trips.
 
Here is the math. At a staggering P54 to 55 per liter of diesel, P 1635 (30 liters x P54.50/liter) is needed on the average for fuel. With 300 passengers, their gross daily income would be P 2,250 (at P7.50/passenger x 300 passengers). Subtracting fuel costs and boundary fees, jeepney drivers either has to shell out some spare cash (if they have any) or put in extra trips since they will be left with negative P85 pesos on the average at the current rates. Even with fares at P8.50, a driver will gross at P2,400 which leaves him only P 215 to take home.
 
This P215 is way below the living wage computed at P 894 by the National Wages and Productivity Board for a family of six (for June 2008/NCR). To reach the living wage requirement, one can compute that the minimum fare should be raised to P10.75, which would in turn hit commuters hard. Any oil price increase this weekend, or in the upcoming weeks and months, would increase these estimates further.
 
The Catholic Bishops Conference of the Philippines (CBCP) has recently called on the government to review the 12-percent expanded value-added tax (VAT) and oil deregulation law. The prelates stressed that instead of giving doles to the poor, the government should focus on providing long-lasting solutions based on economic reforms.
 
The scrapping of 12-percent value added tax (VAT) on petroleum products would give drivers immediate relief. Diesel pump price could immediately go down by around P6.53 per liter without the VAT. Gasoline products will go down by P7.26 and an 11-kg tank of LPG by P97. We can calculate that the removal of the VAT would give an immediate P196 increase in the daily earnings of a jeepney driver.
 
The example above underlines the reality that fare increases are not the real answer to ever increasing oil prices. But on the other hand, it will also be unreasonable to make the drivers shoulder the burden for rising oil prices fully. Stop-gap measures such as discounts are selective; and a reduction on importation costs of parts would not make an impact on the take home income of drivers.
 
Aside from being a well known symbol of the Philippines, jeepneys reflect the level of industrial development that we have reached. We lack a reliable commuting system such as an affordable network of bus and trains. We thus rely on these second hand vehicles converted to public transportation as our main means of movement inland. Improving the plight of jeepney drivers would thus go a long way for their families and to all.
 
Government should control the price of oil. It is the oil deregulation law (RA 8479) that enables oil companies to raise prices without government intervention and allows companies to pass on their under recoveries to the buying public. Congress should pass immediately the bills filed by progressive party lists: House Bill (HB) 3458 which seeks to remove the 12% VAT on oil products, HB 3433 to repeal the RVAT and HB 1724 to repeal the Oil Deregulation Law.
 
To buffet our economy from external oil increases, we should also seek ways to centralize our procurement and buy direct from countries without transfer pricing and add-on costs. Long term contracts with friendly countries could have shielded us from the increases due to speculation in the world market. We should also maximize our indigenous petroleum and natural gas reserves for our own use by investing in extraction and downstream petroindustries. Our own energy resources should be used fully by our people and not be put on sale to foreign interests.