Press Release
November 6, 2007

Oil price hike incurs greater damage on wage earners and small entrepreneurs
Zubiri: Solutions to oil price crisis must be long-term and enduring

Solutions should be enduring and long-term, even if the crisis is in the here-and-now, according to Senator Juan Miguel Zubiri as he acknowledged 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.

"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 will affect those with lower incomes disparately," Zubiri stressed.

"The $100 per barrel forecast might be breached even before December this year which spells not only energy supply worries. Spiraling oil prices push up consumer prices and inflation while it depresses the prospects of jobs generation," he explained.

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 explained.

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 Corporation 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.

He saluted Overseas Filipino Workers since "their huge remittances helped the country attain a stronger peso that lowered costs on imported oil and thus helped contain inflation. However, the relief could possibly lull us into a comfort zone that is only fleeting. Energy crises should be confronted head-on by crucial Energy policies."

Zubiri reiterated that "the passage of the Renewable Energy Bill signifies the seriousness of government to implement long-term solutions to the energy crisis. No less than the Energy Committee chairperson Senator Miriam Defensor Santiago, who was our partner in the passage of the Biofuels law, acknowledges the crucial role of Renewable Energy bill."

"Although we are the second largest producer of geothermal power in the world and source as much as 50% 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."

Zubiri notes that huge potential benefits from Renewable Energy have not been reaped. "Renewable Energy will shield us from expensive imports and supply worries added to the premium benefits of being clean and safe."

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