OIL PRICE HIKES DRAIN DRIVERS’ INCOME

The income of jeepney drivers has plunged miserably since the advent of the Oil Deregulation Law, and more miserably this year owing to the recent wave of oil price hikes.

BY ALEXANDER MARTIN REMOLLINO
Bulatlat
Vol. VII, No. 45, December 16-22, 2007

The income of jeepney drivers -– the Philippines’ so-called “kings of the road” -– has plunged miserably since the advent of the Oil Deregulation Law, and more miserably this year owing to the recent wave of oil price hikes.

Erelito Mendoza, a jeepney driver plying the Cainta-Taytay-Angono-Tanay route in Rizal province, east of Manila, knows this well.

He has been a driver for 30 years. For most of the last 30 years he was able to make a fairly decent living, and did not particularly mind that to be able to do so he had to be awake even before the sun rose and it would be dark by the time he could go home.

But the last six years have been particularly difficult for his livelihood, he said.

“Dati, malaki-laki pa’ng kinikita ko” (I used to earn considerably well), he told Bulatlat in an interview. “Ngayon, halos wala na akong maiuwi sa pamilya ko. Gasolinahan na lang halos ang binubuhay ko” (Nowadays I end up taking almost nothing home to my family. Almost all of my earnings go to the gasoline stations.)

Mendoza is one of the millions of ordinary Filipinos –- drivers and non-drivers alike –- who are reeling from the effects of relentless oil price increases particularly in the last month. The oil price increases are particularly hard for him, since one of his children –- all of whom he is sending through school as the family’s sole breadwinner –- is now in college.

World oil prices surged to $96 at the New York Mercantile Exchange (NYMEX) last month before settling at $95.59 per barrel.

With this, the Organization of Petroleum Exporting Countries (OPEC) was urged to intervene by increasing world supply. But OPEC refused, saying there was no oil supply shortage and blaming speculation for the price jumps.

The deregulated oil market in the Philippines makes the country all the more vulnerable to world oil shocks, as local subsidiaries of oil giants are able to pad pump prices.

The banner story of Business World’s Oct. 31, 2007 issue, citing a recent study by the United Nations (UN), shows the Philippines to be among the countries most vulnerable to oil price jumps -– along with Afghanistan, Bangladesh, Cambodia, Fiji, Laos, Maldives, Nepal, Pakistan, Samoa, Solomon Islands, Sri Lanka, and Vanuatu. In the report the Philippines’ heavy dependence on imported oil and its high level of poverty and inequality were cited as the reasons for its vulnerability.

Deregulation, oil price hikes, and drivers’ earnings

Based on data from the socio-economic think tank IBON Foundation, pump prices have increased by as much as 535 percent since Republic Act No. 8479 or the Oil Deregulation Law – a brainchild of then Sen. Gloria Macapagal-Arroyo along with other laws pushing for the Bretton Woods agenda of liberalization, deregulation and privatization for Third World Countries -– took effect in April 1996. Under the Oil Deregulation Law, premium oil prices have soared to P45.18/liter ($1.10 at an exchange rate of $1:P41.14 as of Dec. 14) from P16.56/liter in 2001 ($0.32 at the 2001 average exchange rate of $1:P50.99), while diesel prices have climbed to P35.95 ($0.92) in 2007 from P13.82/liter ($0.27) in 2001.

IBON data also show that pump prices have been overpriced by as much as P4.55 ($0.11) per liter since 2000.

This year alone, oil prices have increased more than 10 times, with the price of diesel -– which jeepney drivers use -– hiking by P6.50 ($0.157) a liter.

Ordinary drivers as well as transport-sector leaders interviewed separately by Bulatlat over the past three years have said that a jeepney driver, on the average, takes in some 300 passengers and consumes around 30 liters of diesel a day.

Before this year’s wave of oil price hikes, diesel cost P31.45/liter ($0.76). With the diesel cost increases amounting to P6.50 ($0.157) this year alone, jeepney drivers of late have had to shell out P37.95 ($0.92) for every liter of diesel.

With the minimum fare at P7.50 ($0.18) and an average of 300 passengers a day, a jeepney driver usually earns a gross of P2,250 ($54.69). Taking away the total diesel expenses of P1,138.50 ($27.67) at P37.95/liter and the boundary fee of P900 ($21.87), the driver would be left with P211.50 ($5.14) at the end of the day.

Before this year’s wave of oil price hikes, a driver would usually be left with P406.50 ($9.88) on the average after a day’s work. With the slide in jeepney drivers’ earnings from P406.50 to P211.50 a day, we can see that their daily income has decreased by P195 ($4.739) due to oil price increases.

Data from the National Wages and Productivity Commission (NWPC) show that the national average family living wage for a family of six, the average Filipino family, now stands at P664.87 as of July 2007 ($16.70 based on the current exchange rate of $1:P41.14).

Jeepney drivers’ current daily earnings are P453.37 ($11.02) below the national average family living wage.

This is a far cry from what jeepney drivers earned before the implementation of the Oil Deregulation Law.

Sarbing Repaso, a jeepney driver interviewed by Bulatlat in 2004, recalled that in 1996, just before the passage of the Oil Deregulation Law, diesel cost only P5.50 (then $0.21) a liter. At the end of each day’s work, a driver paid P400 (then $15.38) as boundary fee.

Taking in an average of 300 passengers a day at that year’s minimum fare of P2.50 (then $0.10), the driver was earning a gross income of P750 (then $28.86) daily. Taking from that the P165 (then $6.35) spent on diesel daily (P5.50/liter of diesel multiplied by 30 liters a day), as well as the P400 boundary fee, a driver was left with P185 (then $10.58) a day. This was P128.38 below the then national average daily cost of living of P313.38 (then $12.05).

Things today are vastly different from how they were when he was just starting out as a driver, Mendoza shared.

“Noon, hindi problema ang pag-aaral ng aking mga kapatid” (In those days, I had no trouble sending my siblings through school), he said. “Ngayon, iisa ang anak kong nasa college, hirap na hirap kami” Right now only one of my children is in college and still we are having a very hard time.)

Protests

Drivers under the banner of the Pinag-isang Samahan ng mga Tsuper at Opereytor Nationwide (Piston) have held two protest actions in the last three weeks against oil price increases –- a rally last Nov. 26 and a transport strike last Dec. 13.They demanded the following: government control of oil prices and a moratorium on oil price hikes; removal of RVAT (Restructured Value-Added Tax) coverage on oil to effect a P4 rollback in oil prices; and the scrapping of the Oil Deregulation Law and state control of the oil industry.

A few days before the Dec. 13 transport strike, Energy Secretary Angelo Reyes announced that there would be no further oil price increases until the end of the year.

In an interview with Bulatlat, Piston secretary-general George San Mateo said Reyes’ announcement is proof that the government can intervene in the oil industry if deemed necessary.

“They can do it, and this is proof,” San Mateo said. “But what they don’t want to do is institutional intervention, which would mean the junking of the Oil Deregulation Law.”

San Mateo said that if the government fails or refuses to heed all the demands of the Nov. 26 and Dec. 13 protests, Piston would not hesitate to stage other actions come next year. Bulatlat