Reyes: Energy is a political commodity

It is one thing to say that it requires great political skill to manage energy policy correctly and quite another to say that energy is a special political commodity, just because price movements can bring political unrest.

Since the deregulation of the downstream oil industry in the second half of the 1990’s (after a supreme court hurdle and a decision I found ignorant), petroleum products pricing has in the main been left to market forces. This is not to say that there is no market power being exercised by the major players. There clearly is, but I do not miss the days of the Oil Price Stabilization Fund (OPSF) and the associated subsidies, when prices were regulated and such regulations were hostage to political acceptability (including by coup plotters).

Just imagine if refined productc prices were still regulated now, with the P/$ exchange rate and the world price as these are now. I’m glad consumers---most of them anyway---are adjusting without taking to the streets. I dare say that even now, petroleum prices are lower than they would be if we considered the full impact of their use on the environment. If prices were still regulated today, the government would be heavily subsidizing oil prices and it would not be beyond the current administration to subsidize prices just to remain in power. This would have been disastrous as oil price subsidies generally benefit the richer sections of the population---regardless of the protestations of the misinformed sections of the Left.

Comes now the newly designated energy secretary, who candidly admits his only qualification to the post is that he is ‘full of energy.’ It is also likely that he is full of something else. It might also be true that he is indeed a fast learner and that thus far, he has not disappointed the appointing power. But if he indeed has the management experience and the IQ to manage difficult government departments, Reyes should have been appointed chief of PIGSA (Philippine Inter-Galactic Space Agency) which needs his skills.

The truth is that Malacanang has just been using him as a convenient football and kicking him to energy conveniently leaves the DENR post vacant for the former mayor of Manila, he I cannot name because I puke because of all his sanctimoniuous and false religiosity---although I might still puke even if the religiosity were sincere. The former mayor would have been more obviously incompetent in the energy post. This does not mean he would be good as environment secretary, or that Reyes would do so badly at the energy post, though this is laden with many challenges that even Lotilla was just beginning to appreciate. But we cannot fault Popo for leaving now. Popo deserves a rest, although the timing is not good, especially with the problems of power sector reforms not really close to resolution. (Manila Standard Today yesterday said Lotilla was fired. False).

Former energy secretary Geronimo Z. Velasco passed away a few days ago and his passing was publicly announced by an acquaintance at the PNOC. It might be that the man did the nation a great service. But comparisons are difficult because he managed the energy sector under radically different circumstances. And he had economic and political resources unimaginable at this time. Our sympathies to his family and friends.