ON Monday, Manila City Mayor Isko Moreno issued an executive order directing the city government to immediately reduce its fuel use by 50 percent, in anticipation of higher fuel prices and constricted supplies due to the ongoing war by the United States and Israel against Iran. It was an eminently sensible decision on the part of Mayor Moreno, and one that should immediately be duplicated at every level of government across the Philippines.
Under the executive order, all Manila city departments and offices are to reduce the use of fuel for vehicles, generators, construction equipment, and other machinery. The order also prohibits all nonessential travel by city officials and staff, and suspends any other official travel “unless deemed essential and of critical importance to the city government’s operations,” Moreno said. Likewise, all educational trip activities managed by the city government have been suspended until further notice.
Except for health care facilities, all city offices have been directed to conserve electricity by switching off lights by 5 p.m. daily. The mayor added that meetings with village, health and other officials would be held online when possible, and that the city would be recalibrating work shifts and arrangements to reduce commuting.
The order is intended to maintain essential public services and limit the city’s exposure to fuel supply shortages and price increases. While the most critical services are exempt from the order, including police, fire and ambulance services, public health and disaster risk reduction operations, garbage collection and hauling, and traffic management, these departments have nevertheless been asked to implement fuel-saving and other conservation measures where it is possible to do so without compromising service.
Price hikes
As if on cue, at about the same time the quick-thinking mayor’s order was being announced on Monday, local fuel companies announced another round of price hikes, increasing those by more than P1 per liter for all fuel types. In fact, the worst is yet to come, as fuel supplies arriving in the Philippines in the next couple of weeks were already under way before the current war flared up. If the conflict ends immediately, there will be a brief spike in prices in the near future, followed by some moderation. However, it seems all but certain that the hostilities will not end soon, and will grow more intense and widespread, leading to significantly elevated fuel prices for a long time to come.
In a quick analysis published on Tuesday morning, Oxford Economics forecast oil prices to reach $80 per barrel or higher in the second quarter of this year, or to put it another way, beginning about a month from now. The analysts emphasized, however, that there is a great deal of uncertainty in this. While it does not seem that Iran will be able to maintain a complete closure of the critical Strait of Hormuz at the entrance of the Persian Gulf, even an incomplete blockade will severely constrain oil supplies and drive up prices for an extended period, at least into the third quarter of the year and possibly longer.
The city of Manila has a delicate fiscal position with not much margin for unplanned expenses, but it is by no means unique among local government units in this respect. A sharp increase in fuel costs not only affects government operations directly, it raises the costs of energy and goods across the board, reducing economic activity generally. If the government, at any level, does not anticipate this and take steps such as the city of Manila has to manage budgets, it will be too late to do so when the impact of the war in the Middle East arrives in full force.
Implementing strong energy conservation measures now also has another long-term benefit. The current crisis will eventually pass, we hope sooner than later, but even when it does, the adaptations that are learned and put into action now can become habits, and lead to fuel and energy savings as normal practice. We urge every government unit, agency, and for that matter, every Filipino household, to assess its fuel and energy use, and consider ways to make reductions. It may not be possible for everyone to cut fuel use by 50 percent or to make other drastic reductions, but even modest conservation efforts can help.
