Please Pass the Gas
May 16, 2008Isn’t it annoying how the price of gas seems to be increasing with each passing day? I’m not exactly affected by the recent gas hike, but I am aware that a lot of our countrymen are.
As of press time, a liter of gasoline costs as much as a McDonald’s or Jollibee value meal (I reflected on this as I was ordering a Sausage McMuffin with Egg sandwich in McDonald’s, which costs 52 pesos as of press time). Has it gone a point where people have to choose whether or not they should purchase food to sustain themselves for the day or buy a liter of gasoline to get their cars to take them to places? Rice itself is getting to be costly. With an increase in gasoline as well, how can people cope?
Most recently I received an e-mail from a colleague of mine about the recent gas hike. It goes like this:
I hear we are going to hit close to P60.00 a LITER by next summer and it might go higher!! Want gasoline prices to come down? We need to take some intelligent, united action. The oil companies just laughed at that because they knew we wouldn’t continue to “hurt” ourselves by refusing to buy gas. It was more of an inconvenience to us than it was a problem for them. BUT, whoever thought of this idea has come up with a plan that can really work. Please read on and join with us!
By now you’re probably thinking gasoline priced at about P30.00 is super cheap. Me too! It is currently P45.00/liter for regular unleaded in my town. Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a gallon of gas is CHEAP at P30 – P35/liter, we need to take aggressive action to teach them that BUYERS control the marketplace. ..not sellers. With the price of gasoline going up more each day, we consumers need to take action. The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And, we can do that WITHOUT hurting ourselves.
How? Since we all rely on our cars, we can’t just stop buying gas. But we CAN have an impact on gas prices if we all act together to force a price war.
Here’s the idea: For the rest of this year, DON’T purchase ANY gasoline from the three biggest companies: SHELL, CALTEX, and PETRON. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit.
It does make sense to me; however, I can’t help but wonder if it really is feasible. I mean, upon closer analysis of the gasoline industry, it’s more of an oligopoly than a monopolistic competition market. Given this current situation, we can see that there is definitely a small group of firms that dominate and control the oil prices in the market (OPEC itself controls the production and price of oil). They are price-makers–not price-takers to a certain extent. Because there are few participants in this type of market, each gasoline company is aware of the actions of the others; thus, decisions made by one firm influences and are influenced by the decisions of the other firms involved in this oligopolist market.
It makes me wonder though whether the e-mail proposal of buying gasoline from the lesser-known companies will actually work. After all, these small firms are usually price-takers instead of price-makers, because they do not have the capacity to do so. The BIG THREE companies–Shell, Petron, and Caltex–definitely dominate the gasoline industry scene. It seems highly unlikely that not purchasing gasoline from them but buying from other smaller firms will make a huge impact. After all, this is an oligopolist industry and not everyone will also adhere to the suggested method of action/response to the rising cost of gasoline (like those consumers who couldn’t care less about the increase in gas prices because they can afford the luxury of spending so much for their cars).
The only time when gasoline will probably drop here in the country is when the world market’s price for gasoline decreases. I am pretty much very doubtful that our country would be the only one to drop the prices of gasoline, considering that the world market’s price for gasoline as of press time is about $110 per liter barrel. What makes us so sure that if the Philippines decides to drop oil prices, other countries will follow suit?
I don’t know exactly what form of remedy there can be to decrease the increasing price of gasoline, but as ideal as it sounds, all I can say is that if people all over the world were to trade their cars for bicycles or if they switch to more eco-friendly methods of transportation such as solar-powered cars or hybrid cars, then the demand for oil in the world market won’t be as high; thereby; forcing the oligopolists to drop their prices.
The prices of commodities are definitely skyrocketing. With the rise of gas prices, it is inevitable that people in general will have more difficulty coping with trying to make both ends meet. On the brighter side of things, with the rising price of gasoline, there would be less cars on the road and more people taking the public transportation. That would most certainly reduce air pollution! 
by Angela Eliza Lim
world market’s price for gasoline as of press time is about $110 per liter -> I think that should be per barrel.
I also received that e-mail suggesting that we should basically boycott the Big Three. But I don’t think it’ll work, not just because not everyone will participate, but also because we (consumers, i.e. who need gas for our vehicles) are NOT the only users of oil/gas.
Industrial, power and other companies also need fuel. If we stop buying, I doubt that they would – they need it to run their businesses.
In the long term, the only remedy for the oil prices is another form of sustainable energy, and I guess when the world’s leaders decide that they’ve had enough of dependence on oil and start looking for other sources (the search will undoubtedly also take up a lot of resources), then we can be rid of the oil companies’ oligopoly.
Until then, we have little choice but to try to reduce our use of gas.
oops. sorry for that typo. thank you for making that correction
and thanks for your insights, too!
P60.00 per liter is too optimistic. Don’t be surprised if in this year alone, the prices will double. True, a lot of people are affected by this rise in oil prices, most especially since an increase in the price of oil will lead to an increase in the price of other commodities, but drastic changes in oil consumption won’t come too soon. Almost absolute dependence on oil has already ensured that people will continue to use it no matter how ridiculously high its price is already.
Even oil companies can’t lower their prices since they have their own problems that come with this rise in world oil prices. It’s every man (or firm) for himself when the time comes.
gas prices have gone up for the longest time and it’s supply is deteriorating and the bludgeoning economy of China and India the resources for oil are slowly but surely running out so I’m not surprised why the prices are spiking up real fast like joker’s bad puns. anyway i think its high time we start using alternatives for energy production. i heard that the Philippines has plenty of natural resources that people living there don’t actually know what’s lying in their own backyard…….maybe i should ask robin to run for president haha i think that country can start producing alternative gases and the like.
I agree ^_^
Allow me to say that this proposed solution was easier said than done. There have been proposals similar to that idea but its only difference was the duration of not purchasing gas. For example, not buying gasoline for a day will cause their prices to drop due to the lack of customers but sadly, this never happened. So how can our people follow this for the whole year? From a commuter’s perspective, special discounts are given to PUBs and PUJs which means that there is the possibility of the big gasoline company prices to be cheaper than the small ones. Moreover, this “do not buy gas” act, as you said, should be a joint effort between the high and low classes. If ever it is these PUB and PUJ owners would not have a problem following the “do not buy gas” act but it is more of the rich people who would be stubborn to also pursue this “absurd” act for them because they mostly care for themselves and their own pleasure. Therefore, I believe this act that was proposed is ineffective due to our very own citizens who are easily attracted by discounts, citizens who refuse to cooperate with each other, citizens who do not have the discipline to follow such simple (meaning 1 day w/o buying gas) information.
On the bright side of things, coming from an ECE perspective, there is a current existing transportation technology that is environmental friendly and uses air as its own source of fuel. It is called the air-car and it has been released already in Europe. (here is a link as my reference http://www.youtube.com/watch?v=QmqpGZv0YT4) Moreover, the great thing about this automobile is that it is very cheap (as a unit), as far as I remember this only cost around 6-digits (in pesos) so if this technology would be released here in the Philippines then automobile fuel will not be a problem to us anymore.
this is so true!:)
i think we live at a time where having money to spend on gas is what only a privileged few can afford.
Okay, I for one know nothing of the business world, or the economy (shame on me). Plus I’m a perpetual commuter, I prefer to commute. The gas increasing prices though, are still very real. This crisis is majorly affecting everything. Crops and raw materials cost double to be shipped to and from the city, the price of food is increasing, heck, even our village pedicab driver increased the fare in the last price hike (which made me wonder if they used gas to pedal their pedicabs, hahaha).
I guess what we need is more awareness. Sure, we all know that gas prices are rising, and we’ve no idea how to solve it. However, as with all diseases, a proper etiology of the sickness is in order, before we figure out and understand the solution.
For now, though, can we just tell these taxi drivers to stop using LPG gas to make their cabs run? It’s hazardous to one’s health and seriously scaring the crap out of me. Plus it smells awful.
I kinda agree…holding a price war doesn’t seem feasible…we’re not as united as we think…and besides, I don’t think many people would care enough to take such drastic action…I’m pretty sure they’re more worried about filling their stomachs than filling their tanks…
And yeah…one way to lower gas prices is to lower the demand…agreed (^.^)v
“On the brighter side of things, with the rising price of gasoline, there would be less cars on the road and more people taking the public transportation. That would most certainly reduce air pollution!” – Cute ending statement, hahahaha
)
While it sounds feasible, the price we pay for gasoline that comes from the biggest three companies compensates for the kind of gasoline they provide us. Aside from Total, which has very few outlets, there isn’t any other trustworthy gasoline station that can provide high quality gasoline to the general public. I speak from experience- although not exactly mine. I have distant relatives who live nearby. We bought the same diesel powered vehicle at the same time. Because we put value into the gasoline we purchase, we only go to one of the three prominent names in the country to fill up our tanks. Our relatives do not share the same sentiment. Or at least they didn’t. They purchased gas from Seaoil. After traveling a few kilometers, their vehicle stopped. Had they not been persistent in seeking compensation from the appropriate establishments, they would have paid more than PhP 100,000.00 just to fix their vehicle.
THERE MUST BE ANOTHER WAY TO SOLVE THIS CRISIS. I’M SURE IT’LL COME IN AN ALTERNATIVE FORM OF ENERGY. Wise men have said that it would be stupid to solve old problems with the same old solutions- in fact, it would be impossible.
AL, i agree with your blog post! Mag-commute na lang! =) Less pollution na, less gastos pa. Win-win solution.
And if we’re talking about pump prices hiking every Saturday, then it’s better na rin to investigate (if the Senate’s investigating power prices, rice prices) para at least sure tayo na hindi sila nakiki-ride-on sa world market’s prices…
The way I see the proposed solution is in light of 2 things: feasibility and practicality.
The petrol market is dominated by 3 major players, and that by imposing a form of “boycott” on these gasoline companies may cause a decline in the prices of the market good. This is impossible due to the fact that petrol is a staple commodity in the market, and is not solely used by motorists of sorts.
The Philippines as a country is not a position to be able to change the prices of gasoline on a global scale by starting such a boycott. Leaders of the global economic forces (US, China, India, etc) are the prime candidates that have the ability to impose tempestuous trends in a globalized market.
The practical way to remedy the rising oil prices is now on the part of government intervention. As a Keynesian, I believe government regulation of prices on gasoline to benefit the welfare of the population, as of this moment, may be able to somehow quell the unstoppable rise of gasoline prices. However, this is also a bit impractical due to the already rising inflation rate of the country.
So what to do? Adopt Hayek and just leave it alone. Or impose heavy taxes on gasoline to promote the usage of other means of transport. As inconvenient as it may seem, this price hike may be a signal of a form of hyperinflation in the market in terms of gasoline prices. We should lessen dependency on petroleum until time will tell when an alternative, a more available form of fuel is found.
this is actually a very sad reality.. i also used to say that: “boycott na lang yung mga gas company! nila kala nila sila may ari ng mundo?!?” … but that was during my wild, younger days (yuck parang antanda ko na noh?) when i was a little too optimistic about life hehe
now, like BJ said, we really just have to reduce our own gas usage in order to reduce our expenses… Carpooling is a good way to share the expenses between 4-10 people (depending on the car and location haha). Less gas + more people paying for it = easier
not that it would have a large effect on the companies since, also mentioned by BJ, other companies depend on them (i.e public transport industry). This gives them some leeway to be apathetic about the consumer’s woes about the price hike. if there was suddenly a major boycott of all these companies, and all of us consumers, there MAY be some price drop that will occur… but chances of that happening is close to nill
what also bothered me in this entry is this line:
“As of press time, a liter of gasoline costs as much as a McDonald’s or Jollibee value meal”
even if i do pay for my own gas, and i pay for my own meals in McDo or Jollibee, i never got to comparing the 2… now that it was “brought to the surface” it makes me kinda worried as to what will happen in the future… what… will a liter of gas soon be as expensive as having a Buffet meal in Spiral? yikes!
well, ok maybe this is extremely exaggerated, but you know what i mean…
having said those things… hummm…. im afraid i cant think of a good solution outside making your own firm and running the big 3 out of business… of course… not only would that be improbable… but im sure there are more factors that affect the prices outside greed and global prices (i.e Theft, sabotage etc) that, when your there, you may end up being like the big 3 anyway…
all i can say now, really, is that good luck to us as we find a feasible solution to get this fixed ^_^
With the rise of gas prices, our roads would just have more crabbier drivers
As for going for other firms, that is feasible but they are so few in number and at remote and awkward locations in the metro. Its much more convenient to go to the big 3 because they’re everywhere. Let’s say all locations of all firms are equal. I dont think itll affect the price because statistically, each firm would get the same number of clients. A big impact would be when majority go for the smaller firms. We, as a people lack unity to do anything of that scale. Nationwide, steadfact decision to support the underdogs. I think the last one was EDSA revolution (the one and only)
we cant expect a price drop anytime soon. Everyone (okay, most) wants it but not at their expense. Like in school for instance, i hear people saying gas is so expensive its just not right. I find it funny because most of these people drive big gas-guzzling SUVs that carry only one person. haha weird, if they find it expensive switch to a compact fuel efficient car like a jazz or a getz. It may not be like their expeditions or f150s but it sure does consume less and they won’t crowd the school parking lots.
Alternatives are also feasible, as long as they’re not competing with food (read food crisis and link to biofuel). Maybe algae biofuel, we dont eat it and a hectare of algae produces 30x more fuel than a hectare of corn.
two words: TAX CREDIT
My balikbayan uncle from New York told me about it, you get tax credit (bawas sa babayaran mong tax, in simpler terms) for every hybrid car, solar panel, or “green” equipment you buy.
Now of course, its a collaboration between:
1. goverment: pass legislation!
2. car manufacturers: start selling hybrid cars!
3. green equipment companies: sell more solar panels, etc!
By buying hybrid cars (item #2), you decrease the demand for petrol items. This of obviously covers the gas war, AND the electricity hike as well (still figuring how to solve the bigas problem as mentioned by AL hehe)
///a downside however, not all people are keen on buying new cars just to get tax credit. another is that not all pinoys pay taxes!! (try asking your parents, titas, titos..you’ll be surpsised…/:) but hey, giving tax credit is a good start, and should help if not eliminate the gas war problem.///
Forgot to include my link for basis
Anyways, its at http://taxes.about.com/od/deductionscredits/a/hybridtaxcredit.
yeap. i agree.
but i don’t think the hybrid cars will be a “hit” in the Philippines. it’s too expensive.
I don’t think that buying from other oil companies, aside from shell, petron n caltex, would do us, the consumers, any good. Based from studies and from experience, though the prices are uncontrollable, it is safer to buy oil from these three giants. Buying oil from other oil companies would definitely help you save money from gas, but in doing so, you are risking your life and your car too. Most of other oil companies take advantage of these times when giant oil companies hike up their prices to sell their gas for P7-P10 less. And in doing so, more consumers would be diverted into buying their gas, not knowing that they had mixed other liquids, mostly water into their gas. This could lead to accidents, causing us to spend more.
I’m not saying this because I am pro the unreasonable hike in prices of these oil companies. I am also against it. It’s just that the alternative solution presented is too risky. And it is that alternative solution that I am strongly against.
Since we have less possibility in dictating the decrease of gasoline in world market, we better make our own solutions and make use with the resources that we have. I guess, aside from not using cars, the only solution would be to find some alternative for gas. Or the best way to solve two problem at the same time is to sell all vehicles which needs gas and create and improve more public vehicles like lrt and mrt which doesn’t need gas. This would solve not only the problem with the price of gas but would also solve the problem of air pollution. Just like what you said:) commute nlng:) But please remove jeepneys and buses because they are the major contributors not only to air pollution but also to noise pollution and traffic jam.
Well theoretically it should work. you just need to get enough people to do it…. malay mo nagccartel nga yung mga gas stations! haha. so evil. Alternatives are always good too. environmentally friendly stuff is always good! haha! it would be nice to see this happen.
Impossible
first of all, how would you relay your message to the whole population? email? don’t forget that around 95% of our population belongs to the CDE class and that they have limited or no access to the internet. you’ll probably hit 2-3% of our population but for how long? but if you could probably convey your message to the whole population, and somehow they did try it out, how long do you think it would last? i doubt if it would even last for a week! they wont give up something they’ve grown accustomed to- they would think in terms of the Short-run benefits as against the long-run effects of this plan. because to them, it’s a matter of survival. which brings me to my second point..
second, our PUV drivers would definitely not give up their only means of income since they need it to survive (subsistence economy). that said, maybe they’d even think ill of you for coming up with such an elitist plan.
anyway, we cant do anything about this (in my opinion) because the suppliers (mostly from the middle east) would not accept any proposals to lower the prices to which they sell their black gold. if you would notice, the people (class A) living in the middle east are FILTHY RICH from all the profit they get from selling oil. another thing, gas prices in these countries are cheap as hell. In Egypt, a litter of a 95-octane unleaded gasoline only costs around PHP 12.
Don’t blame the BIG 3. Blame it on Capitalism.
I hope your grade isn’t based on my stupid comment but… hooray for commuting.
The downside is you are stinky and sweaty/wet and bedraggled depending on our fickle weather right now. My sister’s company gives her an awesome gas allowance and we just sort of exploit her whenever we need the gas. :p
Haha, oh and AL, magbaon ka nalang kaya.
Gasoline is not only an energy source but is also a business; and no matter what the people may want, businessmen always make decisions that will benefit them in the long-run.
Most of us rely on using cars because of the hassles of commuting or from exhaustion and heat when using bicycles as means of transportation.Anywhere in the world, having a car has become a necessity.
Our culture has also become a culprit in excessive use of fuel because of the new car models with larger engines and terrible gas millage and car races from television and movies. We cannot solely blame gas companies of the increase in prices but we should also take a look at our lifestyle and how we make use of our resources.
I really do believe that the world is created to sustain life in infinitely many years but only if everyone utilizes resources to a certain extent not exceeding a limit. Everything in earth is made to be used, but if there is an excess, there is no doubt of shortage or worse, depletion of resource.
idealistically speaking, boycotting the big 3 sounds like a decent idea. but we have to be realistic here; Filipinos are never really as proactive as we should be. and what about the government? what is the administration doing about all these problems in the market? nothing. taking advantage of the situation, as usual. using it to pursue personal agenda. continuing to live their nefarious lives. mooching off the people. BOO.
si Bush may kasalanan.
we need Tony Stark. haha.
The person who wrote that proposal is too naive. Hybrids are difficult to produce and are expensive, mass transit uses gasoline, and every other engine out there uses a derivative of oil, be it from the power grid or from the fuel. I think that the $126/barrel of oil itself will remedy the problem, albeit slowly. Already, alternative fuels which were once too expensive have now become competitive vis-a-vis oil and it is becoming very attractive for people to do some R&D on alternative sources of fuel and fuel economy. Hence, we’re already on the (rocky) road to oil independence. It will take time but we will get there, and I dont think oil prices are going to fall back to $60 or $80 per barrel simply because of “reduced consumption per capita” in the Philippines. ChIndia, Latin America, Africa, and the rest of Asia will grow (economy) and their consumption will only increase in absolute terms — even if it could possibly be reduced per-capita — and this will have an upward effect on the price pressure of not only oil but also every other commodity.
Before making this comment, our newsroom just received word of another round of oil price hikes over the weekend. Haaaaaay.
In my opinion, the soaring oil prices will be with us for a long time, partly because demand’s still up (China and India hello there) and we’re finding less and less sources for it.
Big three oil companies boycott? Even before we could boycott them, we should take into consideration that we are already very dependent on the oil companies for many of our fuel needs. Also, in many parts of the country these companies are the only ones present. So, I think it won’t work.
Which is why there really is a need for us to turn to alternatives that could wean us from our yearning for oil (and save our planet at the same time hehe). However, I think people, governments, and industries are really slow in catching up on these alternatives, so it would take time before we could really get out of this mess. Sadness.
In the meantime, let’s commute more, and at the same time advocate green energy solutions in our homes and communities.
Oh, sorry, “Even before we could boycott them” should have read “Even before we think of boycotting them”. Medyo mali eh. AHahah.
Hmmmm yeah i don’t think it is a feasible task but it sounds really good if it were to be achieved. As you said there are some who wouldn’t care if prices were to increase because they can afford it. Public transportation is the best way to combat these increasing gas prices the police only need to increase security with these public transportations to lessen theft. haha
The ever increasing prices of oil is a sign of the times and so, I doubt that gas companies like Petron or Shell or Caltex have much say in their own prices.From what I hear, gas costs the least here, in the Philippines already so I doubt that we ask for a significant decrease in prices. Fortunately (or unfortunately) We have come to an age where several of those previously considered as “third-world” countries are making the jump to first-world status, such as China and India and as part of their new economic social status among other countries their energy requirements are reaching the levels of the USA. The world, however is not producing more oil. It is producing as much oil as it had been prior to this era of our time, hence with an increasing demand but constant supply, the prices have nowhere to go but up.
Of course, had economy been the only issue, throwing more money at the problem would have been sufficient but it is not. As our energy consumption has gone up, so has CO2 emission which in turn is causing global warming which in turn is causing climate change.
The problems here are very complicated because we are dealing with corporate giants, rising nations, world economics and environmental calamities and no one true solution exists to answer all these problems at the same time save perhaps for a new, renewable, non-polluting energy resource. But even then, will oil corporations will allow it to see light of day? Like I said, we are dealing with oil-producing corporate giants like Aramco who are earning billions from the current state of the world.
My comment is…. In order for gasoline to go down, the dollar must be strong. As you can see, the credit crisis in the US greatly affected their currency and the trade of oil comes in two currencies only, one is the dollar and one is the euro. So, if the dollar is weak, the technically, any commodity that trades in that currency increases. Furthermore, emerging marketes have so much demand. China and India eats a lot of oil. The demand of China must be lessen in order for the oil price to move lower to. The government has just recently cut their production fom 8 hours to 6 hours per day but it is still not enough to lessen the demand of oil.
Our family has stopped using our car years ago, and we have been taking public transportation ever since, not necessarily because of a great desire to save the environment, but mostly for convenience, and to save money as well. Gas prices are really soaring so high. But I cannot say that the price hikes are not affecting me, because I am fully aware that this is a national problem (not to mention global!) and that increasing gas prices would also mean increasing transportation fare and increasing price of commodities (such as food).
Now more than ever, people are becoming more aware of the need to save money and to save the environment. In our Sci10 class one time, a blockmate mentioned that since tricycles and jeepneys are technological dead-ends and pollute the environment more than any other vehicles, then people should just abolish them and buy cars. I thought that what if everyone has a car–wouldn’t that be costly to the pocket and to the environment too? Besides, not everyone, or should I say, MANY people cannot afford to buy private vehicles. So I believe that the key is in improving the public transportation system.
I super agree with this statement:
“…if people all over the world were to trade their cars for bicycles or if they switch to more eco-friendly methods of transportation such as solar-powered cars or hybrid cars, then the demand for oil in the world market won’t be as high; thereby; forcing the oligopolists to drop their prices. The prices of commodities are definitely skyrocketing. With the rise of gas prices, it is inevitable that people in general will have more difficulty coping with trying to make both ends meet. On the brighter side of things, with the rising price of gasoline, there would be less cars on the road and more people taking the public transportation. That would most certainly reduce air pollution!”
On part of the consumers, taking public transportation, and on part of the government, improving the public transportation–this would, of course, seem like merely a band-aid solution, because it does not address the oil problem head-on. But then again, with the oligopoly working, can we really rally in front of the oligopolists and dictate our rights to the price-makers? Can we all afford to boycott their goods? Admit it: we need their goods. Buying only from small oil companies, as explained in the article above, would be a simplistic solution. At times like this, let’s try to look at the big picture. Yeah right, we need gas, so there is a great demand for gas. The supply remains constant (or is it lessening?). Thus, prices go up. But look–if we lessen our need and demand for oil by using public transpo, by using bicycles or even just walking, and by finding alternatives to oil, then not only do we reduce air pollution, we also indirectly dictate the decisions of the oligopolists.
I think the idea of “boycotting” the oligopolists is difficult to implement, maybe because Filipinos are so caught up with the different “quality levels” these three biggies offer. Caltex branding itself with clean gas; Petron gas being efficient and finally, Shell having the all-natural and “race performing” gas had just been labeled so well that buying from others might put a risk on their car’s durability.
For me, gas prices decreasing is hopeless unless we find an alternative energy to keep up with our lifestyles, so I’d say trading your cars with bikes is a more feasible alternative. Only if we can encourage people to do so… T_T sad to say, a pretty damn hard task to accomplish for BF.
I think if we are able to do as proposed to boycott these companies and should it bring the price of gas down, it more likely that these companies would rather export what they import..since Petron and Shell have refineries, they may not be limited to the domestic market but they may also export to compensate for the losses here or simply fold up if the company is fully import dependent. If one would check the financials of Petron, it also indicates some portion of their sales are for export. If we force to stop exports, they would rather close down.
One question, will our 89Million people have enough world price effect against over two billion people from China and India? If we are not marketable for oil, then the other developing nations are and this is where the exports would go.
Since I work from a bank and we lend to gas dealers and their suppliers, you would be surprised that small players also buy from the guys with the refineries. Indeed, they are price-takers.
Furthermore, commuters are not the only consumers of oil. Power plants need oil to run. So, are we willing to give up airconditioning, TV, PC gaming, internet, malling and movies? If the answer is yes, then where do we put the employees of these companies? Who will absorb them now?
I think the higher prices only reflect the true value of oil with demand soaring while output remains constant.
That is why in economics, the best ally of any economy is technology through education. R&D will help us look for alternatives but it must be admitted that we may be years or decades away from other forms of more efficient energy production. (Example: Solar energy though sustainable, is very costly because current technology is only 30% efficient in converting solar power to other forms such as electricity.) Otherwise, any other solution we propose will only last for the short-term. The very reason that US and Japan have become highly developed for a very long time is due to their investment in R&D.
The only country I do not hear any complaints from is Japan. It does not complain about high land prices and high food prices and oil prices. It competes with electronics, manufacturing, & finance. That is how they cope. They have value-added goods and it affects their margins very little. If one would notice, they are always concerned with the price of yen because it is the major factor affecting their exports not the price of inputs.
We on the other hand, have remittances from a competitive workforce. Where do these people invest? They invest in real estate, imported cars, and othe imported items. Their children are well-educated but are likely to become emigrants. So, the best solution would be to use the precious remittances (while we still have it) to be invested with R&D. IRRI provided technology for other countries, so why not increase our competencies here that we may find the long-term solutions we are looking for.
Note: I agree with short-term solutions of reducing demand via eco-friendly solutions, but someone else will definitely take up that slack of demand, maybe not from this country but from the others who want to become the next world superpower.
Aside from emerging markets, there are a myriad of other factors driving the price of crude; among them supply hiccups caused by the chaos in Iraq, political and economic turmoil in oil-producing nations such as Nigeria and Russia, the 2005 impact of Hurricane Katrina’s on the Gulf of Mexico where there are numerous offshore oil rigs, and fears of terrorism.
Alot of industries are dependent on petroleum products, not just the commuting public, and a boycott will cripple businesses.
Abstaining from oil is not a decision made overnight, it calls for a change in our very own inefficient capitalist lifestyle, coupled with reforms in our own government’s foreign policy, corporate social responsibility and continuous development of our own alternative energy sources to cut down on our unquenchable thirst for blood oil.
^ On Fred: power plants need ‘coal’ to run. Coal as an energy source is distinct from oil.
I am a little boy in the world. My sister tells me to skip breakfast so she could go to school. Please tell people to try to harness the full potential of the Ammonia electricity. I want to eat Mcdo…….
The paradox to me is this–with gas prices going up, why am i not seeing less cars on the road or why is traffic still as bad, if not worse now(and it’s not all MMDA’s fault).
To me, the challenge getting people to use less gas…and this boils down to getting everyone to change the way we live our lives.
Yes, biking will help and using mass transport–but how do we get the car-riding population to do just that? The lower income brackets (people with no cars) worry more about rising food costs. The midde class (car driving and riding population) worry about rising gas AND food costs.
The problem is not purely an economic question (supply and demand) and must be addressed at a cultural, social, and behavioral level. We are a driving culture. The people who proposed the color coding to lessen traffic may not have considered that instead of not using cars, families who can afford bought another one thus adding more cars.
Some doable (and not so doable) ideas:
1. Push companies to allow employees to work from home.
2. Less school days, less cars–students will love this!
3. Incentives for people to use mass-transit or drive less–institutionalized bus system for students then students who are part of the bus system get meal/food rebates.
that said email has been circulating around for as long as when Jesus first rode the dino.
anyway, bottomline of how to bring down gas prices is, to drastically cut down our use of gasoline/ petrol. pero how can that happen? everybody uses gasoline.
the mere fact that you’re on the computer reading this means you’re using electricity that was ran by gasoline generators.
the only way gas prices can come down is if the supply increases. but short of saying, the whole world should invade the middle east and force those insurgent oil refinery owners to pump out more gas…. there is nothing we can do.
we explore for oil, those greenpeace idiots start protesting.
there are the same idiots that are demanding for cheaper gas, btw.
as a country, how can we lower demand for oil? maybe if we lessen those jeepneys on the road by making public transportation gov’t owned?
protests all around, yah?
carpooling is something the country should learn to do. that’s much better than fx taxis.
idunno, i’m just babbling here. good luck with your project.
- teh vestibulian.
It is really frustrating because we can’t do anything that much to solve this problem. Oil prices are usually dictated by the oil producing companies in Middle east and South American countries.
Gasoline prices affect everything else. If transportation costs are to increase, then all our daily grocery items will have to increase prices as well.
If we follow basic economics, what we just have to do is either increase supply or decrease demand. As a matter of fact, Mother Nature is on our side in the first part. We are running out of gasoline sources. (And i am happy to think that whoever company manages to find sustainable sources of energy first would win this market in the long run).
As for the second part, it will involve our cooperation. As an Atenean student, please learn how to commute so you won’t have to ride a car (all by yourself, with the driver) everyday. Less gasoline consumed and less traffic along Katipunan.
Or if you are really not into commuting, arrange a carpool with your other neighboring friends.
I agree as well. We need to think of creative ways to fight the increasse of gasoline. Try walking: it’ll make you look fab! haha!
boycott gasoline! haha:P
I agree! We have to do our part!! Carpool if it’s possible or commute! Save gas!
i could just imagine the time when one liter of gas would be enough to cover a public student’s tuition fee for a year.
this is sick.
holler to the government! and to all of us as well!
Buying from the smaller gas stations sounds like a good idea for the big three to lower their prices, but my question is, is there much of a difference in price? Also, are these gas companies actually overpricing their gas? If they were, than this idea would be feasible, but in my opinion, these companies are in as much of a pinch as we are. The big 3 may be the biggest gas companies in this country, but even they are under the mercy of global oil prices. Its a global crisis this is. As of the moment I do not see any real solution to this. I do not believe mere energy efficiency is going to decrease global oil demand. There are way too many people who are used to energy-wasting lifestyles and those who aspire to have one. You want to lower the price of oil? Stop using it. I actually hope oil keeps rising because it will come to a point where alternatives that were once thought to be too expensive like electric cars or solar cells, are gonna start to look pretty cheap. The sooner we get rid of our oil dependence, the better.
I agree, utilizing public transportation would definitely help but it would be best if the government gave priority to developing our public transport system (particularly trains) so it will be more attractive to the people.
We will be forced to innovate, it is very probable that gas may hit 70pesos per liter. Oddly with the rise of fuel prices, people are demanding alternatives.
When demand rises, Prices will rise. Let us say everyone thinks that gas powered vehicles are too expensive to maintain than electric cars, demand will skyrocket for electric cars, demand too for electricity will increase. With all these demand prices will skyrocket. this already happened with wind turbines, with only 2 or 3 companies making these massive wind turbines they cannot keep up with demand thus, the increase in price naturally even if the companies want to produce them as cheaply as possible.
Governments around the world should start working together else chaos will ensue in the markets of fuels. Imagine investing in a wind turbine today, only to find a year afterwards that the price when you got it was inflated due to demand, and thus the value of your turbine will drop. Like what is happening in the US land/home markets.
finally, i think the solution is open-source, people should start sharing information on technology. If the companies of wind turbines cannot produce enough, let others produce it. Let saving the world be more important than profit
[...] that a lot of our countrymen are. As of press time, a liter of gasoline costs as much as a McDonaldhttp://livingindemand.wordpress.com/2008/05/16/pass-the-gass/Power companies are ripping off consumers Times OnlineUK consumers are being ripped off by a [...]
making the people use bicycles etc. require effective social marketing campaigns. this responsibility is not to be best left only to the government.
# Make public transportation more attractive and convenient
# Centralize public transportation. Make them government owned while former-owners may serve as investors. Sacrificing a little will yield better results– no competition, no traffic, no more ‘agaw sakay’
# the government should own utilities so that they may be able to control them
# presidential terms should be long enough to allow plans to go to completion. 6-year terms result in development arrests. Initial investments are left to rot
#expand MRT stations
#tax civilian vehicles, remove tax from industrial deliveries and public transportation— this strategy may be employed temporarily to help shift as much commuters to public transportation…plus, many will be forced to take carpools
#if all hopes fail, move the capital. Recently metro manila is expanding to the outside circle such as cavite, the south, bonifacio global city, taguig, et cetera…
I’m totally with Al Gore on this. Carpool!