$100 a barrel oil
Editorial
‘Even if the peso goes up to
40 to the dollar, we should avoid monkeying around with pump prices.’
O il prices hit $100
a barrel middle of the week in New York. Prices have since eased back by a few
dollars but it’s still anybody’s guess where they are headed in the long-run.
One line of analysis says soaring prices are the result of speculation due to
political instability among some leading producers. Another says higher prices
are a reflection of the irreversible depletion of the world’s extractable
hydrocarbon deposits.
Whichever way the debate is resolved, it’s likely that a
$100/barrel oil regime is here to stay. The only question is whether it can be
kept that way for some reasonable time into the future.
The Philippines, fortunately, is in a much better position to
ride out a disturbance in the global oil market. Strong dollar flows have placed
the country in a position where it does not lack for money to pay for oil
imports. This is a dramatic improvement from the 1970s to the 1990s when the
country was chronically short of dollars to pay for crude.
We don’t have to be reminded that the strong dollar flows are
bought at the price of the blood and sweat of our overseas workers and the
weakening of the family ties among those they have left behind. That’s a given.
China and India have been blamed for driving up demand for
oil because of their rapid economic growth. They are prepared to bid up crude
prices for as long as they can meet their requirements. That should serve as a
lesson for us. The problem is not high oil prices. It is our ability to secure
our requirements.
We should be ready to pay market prices for the petroleum
products we use. Crude at $100 a barrel? Then we should be prepared to pay for
the peso equivalent of the gasoline, diesel or LPG we use. The stronger peso has
given us a cushion from higher crude prices. Businessmen expect the peso to
further strengthen this year (we are not so sanguine because of higher oil
prices tend to push up the demand for dollars). But even if the peso go up to 40
to the dollar, we should avoid monkeying around with pump prices.
The usual suspects from the anti-business crowd are again
calling for a freeze on the prices of petroleum products. They claim the oil
companies are exploiting rising crude prices to further pad profits. Their
proposed solution is to go back to government-dictated pricing.
We have been there before. Every time gasoline prices were
raised, drivers stayed at home and their supporters spilled into the streets.
Not one additional barrel was added to the national inventory; everybody
suffered from aggravation.
There should be no retreat from deregulation. | 
