Miro Quimbo warns: Price freeze on crude oil may further hike costs

Imposing a price freeze on crude oil will only make the situation of recent oil price surges worse, House ways and means panel chairperson Miro Quimbo said on Tuesday.

“I have never been a fan of price freezing, especially on oil because if we do so, we would have good intentions. But based on our history, when you freeze the selling price of crude oil here at US $120 per barrel at pipilitin natin sila na magbenta ng below that, hindi na sila magbebenta (and we force them to sell below that, they will no longer sell fuel),” Quimbo said in an online press conference. 

“At kung walang magbebenta (And if no one sells), not only are we going to have a problem of rationing, but more importantly, kaunti ang maibebenta (few will sell fuel). Basic law of supply and demand, magmamahal siya (prices will go up). It would be counter-productive,” he added.

However, Quimbo said the House’s proposed Bayanihan 3 measure to address impacts of the energy crisis considers an inclusion of price freeze for essential goods during emergency situations. 

“We want to amend the Price Act so we can include essential goods [alongside basic commodities which are covered by the price freeze] during emergency situations,” he said.

Under the Price Act, prices of basic necessities in an area will be automatically be frozen at prevailing prices or placed under automatic price control under the following conditions, unless otherwise declared by the President: 

• The area is proclaimed or declared a disaster area or under a state of calamity;
• The area is declared under an emergency;
• the privilege of the writ of habeas corpus is suspended in that area;
• The area is placed under martial law;
• The area is declared to be in a state of rebellion; or 
• A state of war is declared in that area.

The Price Act classifies the following as basic necessities: 

• Rice; 
• Corn; 
• Bread; 
• Fresh, dried and canned fish and other marine products;
• Fresh pork, beef and poultry meal; fresh eggs; 
• Fresh and processed milk; 
• Fresh vegetables; 
• Root crops; 
• Coffee; 
• Sugar; 
• Cooking oil; 
• Salt; 
• Laundry soap; 
• Detergents; 
• Firewood; 
• Charcoal; 
• Candles; and 
• Drugs classified as essential by the Department of Health (DOH).

The same law brands the following as prime commodities: 

• Fresh fruits; 
• Flour; 
• Dried processed and canned pork; 
• Beef and poultry meat; 
• Dairy products not falling under basic necessities; 
• Noodles; 
• Onions; 
• Garlic; 
• Vinegar; 
• Fish sauce; 
• Soy sauce; 
• Toilet soap; 
• Fertilizer; 
• Pesticides; 
• Herbicides; 
• Poultry; 
• Swine and cattle feeds; 
• Veterinary products for poultry;
• Swine and cattle; 
• Paper; 
• School supplies; 
• Nipa shingles; 
• Sawali; 
• Cement; 
• Clinker; 
• GI sheets; 
• Hollow blocks; 
• Plywood; 
• Plyboard; 
• Construction nails; 
• Batteries;
• Electrical supplies; 
• Light bulbs; 
• Steel wire; and
• All drugs not classified as essential drugs by the DOH.

— JMA, GMA News