THE Oil Price Stabilization Fund or OPSF was created by Presidential Decree 1956 by the then President Ferdinand Marcos in October 1984. The system was developed to address the worsening global oil crisis then that resulted into fluctuations of oil prices on consumers.
The system was simple that when oil prices are down, oil companies contribute to the fund. When prices go up beyond a level set by the government, the latter pay oil companies to maintain the pump prices at more or less constant that produces less negative impact to motorists and to the economy as well.
The concept however was criticized due to some complications such as the exchange rate and the number of times the oil price is hiked more than it is rolled back. This resulted into the OPSF abolition in 1996.
Shortly after, the price of petroleum products was de-regulated, giving oil companies their freedom to increase or lower down their pump prices taking into consideration fair market competition.
In economics, the greater the competition for goods and services, the better for consumers or end-users. This however seems not applicable to the current situation on fuel. Despite the price competition, motorists cannot feel anymore its benefits and the price of free market due to the very high price of fuel.
There are calls these days to revive the OPSF in order to address the worsening price escalation of petroleum products. However, safeguards and rectifications to its flaws should be considered.
The government is subsidizing the public transport sector. Instead of doing so, it should subsidize fuel so that even those middle class private vehicle users would benefit from such. Motorists do not only come from public transports but also from private sector who are also burdened from fuel price increase.
The government must act now to find solutions to the present fuel crisis. US President Joseph Biden has already ordered the release of the government's oil reserves as they too are affected by the rising cost of dieael and gasoline.
I am quite sure that government energy experts have their solutions on hand and its a matter of implementation. Autorities should act fast.
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