Making DOE understand temperature compensation

With the prices of petroleum products on the rise again, Speaker Martin Romualdez convened a consultative meeting with the Department of Energy (DOE) and top oil industry players on September 18, to map out plans on how to address the issue. The government is mulling lower oil taxes to reduce prices.

So far according to the Land Transportation and Franchising Regulatory Board (LTFRB), it has already distributed more than P1.089 billion from the P3 billion allocated for fuel subsidy to drivers and operators of public utility vehicles. The LTFRB is also considering these operators’ rate increase petitions.

If the DOE were doing its mandate, it should have found a way to reduce oil prices by now. In fact from these savings, the government would have the means to prepare for future oil price increases. The fund could also be used to subsidize fare hikes, explore and develop alternative energy sources, subsidize power rate increases, etc. Imagine how the government can do all these without the need to use revenues that could instead be used to address other critical and important problems facing the country.

These options are possible if we implement temperature compensation in our country, as in many countries for years now, which has resulted in savings to consumers every time they buy oil products. I’ve sent the DOE an email of my write-ups on temperature compensation that were published in the Inquirer’s Opinion page on June 14, 2022, and Feb. 2, 2023. To my surprise, the DOE appears not to know anything about this method and asked me to present the technical aspects of temperature compensation to its technical committee.

Temperature compensation is nothing new in our country. In fact, according to the president of National Power Corp., Fernando Martin Roxas, in his reply to my email, the company has been practicing this method in their diesel purchase from Petron Corp. He said that the company pays for their diesel purchase based on the volume at 15 degrees Celsius, which is what temperature compensation is all about.

To date, the DOE has formed three commissions, the last headed by Finance Secretary Benjamin Diokno, to study if oil companies are not overpricing their products. All these commissions concluded that they are not. Yet these commissions never said anything about the practice of temperature compensation, which saves the consumers money every time they buy fuel. To the DOE, oil companies are more important than Filipino consumers. Congress should look into this.

Ernesto M. Adaya, [email protected]