The Impact of Increasing Oil in the
City of Valencia, Bukidnon
Introduction
Price increasing or inflation has been the main and biggest problem of the
Philippines facing right now since the covid 19 pandemic started. Oil, as an essential
product, increased its price in Valencia City right after a huge outside issue
happened and this inflation just made an impact to the consumer specially in our
family. No oil supply problem in PH, but rising prices prompt call for deregulation
review. There is still enough supply of oil products in the country, but rising pump
prices calls for need to review the oil deregulation law, the Department of Energy
(DOE) told lawmakers.
Background
Philippines imported various types of crude oil. Around 85 percent of the total
crude mix (30,200 MB) was sourced from the UAE, Kuwait, Russia and Saudi
Arabia. The remaining 15 percent was imported from ASEAN countries, Australia,
Taiwan and South Korea. The Philippines has only two active petroleum fields:
Galoc, an offshore field in the Northwest Palawan Basin, and Alegria, an onshore
field in the Province of Cebu, It is where the biggest oil and gas field found and then
traveled to Valencia, Bukidnon from Cebu.
Statement of the problem
Increasing of prices in oil caused an impact of the Valenciano’s specially in
our family who used to consume a lot. This means you'll have to spend more for the
same goods that you used to purchase at a lower cost. For some, this may mean a
lower standard of living and letting go of luxuries to afford basic goods. The
Department of Energy (DOE) says the surge in global oil prices was triggered by
Ukraine war. With it comes the Philippines' first double-digit increase in the cost of
gasoline on March 15. The price of diesel rose 13.15 pesos per liter and gasoline
7.10 pesos. The price in oil before increased it price from 30 Pesos for 1/2 kilo to 50
Pesos. This is because the gas has huge increased in price and so the oil had to
increase to. This inflation put Valenciano’s or people in Valencia city to lower their
standards of living and caused so much poverty to people who already living with a
low standard since several people lost their job due to the pandemic.
Objectives
1. To determine how this oil inflation affect the economy and the daily life of
Valenciano’s;
2. To figure out the cause of the inflation.
Alternative Courses of Action:
Advantages
Increasing oil price will only have advantages to those who create and
produce this product since this thing is very essential that people need to
purchase no matter how high the price is. But this also help people to
minimize using oil and lower their body fats since oil contains more fats.
Disadvantages
Price increase of the oil has huge disadvantages to economy since it’s
been the main and one of the most essential products in lives of Valenciano’s.
Several Valenciano’s lost their job due to the pandemic and people needs to
purchase this oil to cook their foods. Their money budget who used to pay
their debts, purchase some of foods and Essential needs will change and
decrease its quantity that caused lack of foods to eat and caused financial
problems.
Areas of Consideration
Recommendation
Conclusions
The first impact of higher oil prices in the Philippines is its “shock” to
commodity prices. According to JPMorgan Chase & Co. and as cited by Business
World, the oil price hikes could slow down growth in Southeast Asia, especially in the
Philippines. Likewise, when commodity prices are high, and the household income
remains unchanged, it means lower disposable income for that family. In other
words, a household’s regular income would afford a lesser amount of goods. Since
we have established that oil prices are tied to other commodities in the market, price
hikes also mean a higher cost of living. Aside from paying more for the same amount
of gasoline, prices of food, fares, and other daily expenses may also rise.
Furthermore, the oil price hikes directly hit the transport sector. Aside from needing
more to cover oil costs, public transport groups are also worried about drivers’ take-
home pay. As a result, they are now lobbying for a “conservative fare increase” and
an example of this was the transport free from CMU Musuan to Valencia City which
cost Php 20.00 (previously Php 10.00).
