ORAS NA !

WHY THE PRICE OF OIL KEEPS ON SOARING?

Worldwide, the prices of oil reached unprecedented levels. The record-high $141 per barrel and its continous increase remains unabated. As a result, economic crises are everywhere and the most affected are Third World Countries like the Philippines. Why do we have an oil crisis? Is this something political or just machinations of a cartel?

THE 1973 OIL CRISIS
The 1973 oil crisis began on October 17, 1973, when the members of Organization of Arab Petroleum Exporting Countries (OAPEC, consisting of the Arab members of OPEC plus Egypt and Syria) announced, as a result of the ongoing Yom Kippur War, that they would no longer ship oil to nations that had supported Israel in its conflict with Syria and Egypt (the United States, its allies in Western Europe, and Japan). The same time, OPEC members agreed to use their leverage over the world price-setting mechanism for oil in order to raise world oil prices, after the failure of negotiations with the "Seven Sisters" earlier in the month. Because of the dependence of the industrialized world on crude oil and the predominant role of OPEC as a global supplier, these price increases were dramatically inflationary to the economies of the targeted countries, while at the same time suppressive of economic activity. The targeted countries responded with a wide variety of new, and mostly permanent, initiatives to contain their further dependency. (source: Wikipedia, the free encyclopedia)

THE 1979 OIL CRISIS
The 1979 (or second) oil crisis in the United States occurred in the wake of the Iranian Revolution. Amid massive protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979, allowing Ayatollah Khomeini to gain control. The protests shattered the Iranian oil sector. While the new regime resumed oil exports, it was inconsistent and at a lower volume, forcing prices to go up. Saudi Arabia and other OPEC nations, under the presidency of Dr. Mana Alotaiba increased production to offset the decline, and the overall loss in production was about 4 percent. However, a widespread panic resulted, driving the price far higher than would be expected under normal circumstances. In the United States, the Carter administration instituted price controls. In 1980, following the Iraqi invasion of Iran, oil production in Iran nearly stopped, and Iraq's oil production was severely cut as well. After 1980, oil prices began a six-year decline that culminated with a 46 percent price drop in 1986. This was due to reduced demand and over-production, and caused OPEC to lose its unity. Oil exporters such as Mexico, Nigeria, and Venezuela expanded. The US and Europe got more oil from Prudhoe Bay and the North Sea. (source: Wikipedia, the free encyclopedia)

THE PEAK OIL

The Earth's total endowment, before humans started using it, was roughly 2 trillion barrels of recoverable oil. About half of it is used up. Consumption is currently 31 billion barrels each year. Crunch the numbers and you will see that the oil will be gone in 32 years presuming the rate of consumption does not change. In reality, demand is increasing. Very little oil has been found within the past 30 years and the prospect of finding more is dim. (source: PLANETFORLIFE)

The Peak Oil issue was not so much given attention but was dismissed as alarmist and without basis. However, the consistent low production of oil and the spiralling prices made more people give a seroius consideration of this global concern. Logically, after the peak, oil production will become scarce and high demand will not be met. Gone are the days of the cheap oil era.

Why the price of oil keep on soaring? The answer is basically anchored on the Law of Supply and Demand. According to US Energy Secretary, Oil prices are hitting record highs because production has not kept pace with increasing demands.

ALTERNATIVE SOURCES OF ENERGY

Governments should now consider a change of policy direction in so far as energy is concerned. Alternative sources of energy should now be tapped to address the issue of the coming global oil crisis. Non-fossil and renewable sources of energy such as solar, hydro, wind, biomass and the like have to be developed. The business sector should invest on these ventures to avert a worldwide economic recession due to high oil prices.

in the jungle (the lion sleeps tonight)

LIBERAL PARTY PRESIDENT MAR ROXAS URGES THE EXECUTIVE DEPARTMENT TO SUSPEND THE VAT OF PETROLEUM PRODUCTS

(adopted from Senator Mar Roxas' official website)

Senator Mar Roxas renewed his call for the immediate suspension of the value-added tax (VAT) on petroleum products, as fuel pump prices have yet again increased and is seen to continue increasing.

"When will the government start to listen, when consumers and the transport sector fall on their knees because they can't anymore carry the brunt of continued price increases? Government should now heed the call of the people for immediate relief now," he said.
Pump prices have increased 15 times already this year, when oil companies hiked the prices of diesel, gasoline and kerosene by P1.50 per liter this weekend. Roxas noted that diesel price has now gone up to nearly P50 a liter.

The Chairman of the Senate Committee on Trade and Commerce pointed out how unjust it is for the government to earn windfall revenues at the expense of consumers and the transport sector. He noted that Dubai crude was only $35 a barrel when the expanded VAT law was passed, and it is now almost $125.

"Their answer to our repeated call for immediate relief is ‘we will subsidize this, we will subsidize that using our VAT windfall.' Instead of giving direct relief, the government chose to take a route that means more bureaucratic layers, more decision-making points, more avenues for leakages," he added.

"Instead of continuing to add to the people's burden, why not return to the people their hard-earned money? Ang isyu dito, kanino bang pera ito, at sino ang dapat magpasya kung saan ito gagastusin? (The issue here is, who's money are we talking about, and who should decide where this will be spent?) It's an issue of fairness," He said.

"It is better to leave the decision-making on how to use their money to the people themselves, because they're in the best position to know what their needs are," he stressed.

The Liberal Party President said he expects the government to yet again refuse to heed call for the immediate suspension of VAT on oil, but he would nonetheless continue to call for this, as the people's welfare and the economy, hit by a perfect storm of food and oil price hikes, is at stake.

"Para na tayong sirang plakang paulit-ilit na nananawagan sa gobyerno para agad na suportahan ang pag-suspindi sa VAT sa langis. Pero patuloy natin itong ipapanawagan, dahil ang bulsa ng Pilipino ang nakasalalay dito (We're like a broken record already in calling on the government to finally support the suspension of VAT on oil. But we'll not stop, because the people's pocket is what's at stake here)," he added.

MAR ROXAS' CHEAPER MEDICINE LAW: A TIMELY SOLUTION TO THE INACCESIBILTY OF QUALITY AND AFFORDABLE MEDICINES

Senator Mar Roxas, principal author of the Universally Accessible Quality and Affordable Medicines Law pushes for the immediate issuance of the law's Implementing Rules and Regulations (IRR) in order not to delay the delivery of quality health services to the poor. According to the senator, he will monitor the implementation of the law and vowed to prevent it from being diluted in the IRR.

The new law will allow the parallel importation of quality and cheaper medicines and empowers the Bureau of Food and Drugs (BFAD) to regulate its importation. The people will now have access to quality cheaper medicines compared to the present situation where the prices of quality medicines are prohibitive due to the monopoly of multi-national drug companies. This is a timely solution to the inaccesibilty of quality and affordable medicines.

WHEN GAS PRICES GO UP

My friend Hubert Paz of Davao City sent me this forwarded message and I find it very amusing. I took the liberty to publish these pictures in my blog so that we can have a respite of the continuos economic hardships that we are faced with.

VIGAN CITY COUNCIL MEMBERS VISIT CAOAYAN AND STA. CATALINA TO EXPLAIN THE METRO VIGAN CONCEPT

VM Franz Ranches explains to the members of the Sangguniang Bayan of Caoayan and Sta. Catalina the Metro Vigan Coordinating Council.