It's All About World Economics for Gas Prices

Aquino Legacy
Translation: The difference is big.

It's no secret that I'm getting upset at the rising prices of gasoline. However, I've noticed some idiots on Facebook that are saying that outgoing Philippine President Rodrigo R. Duterte is at fault. Some may even say that the late Benigno Simeon "Noynoy" C. Aquino III is better because of the lower prices of gasoline. In college, I remembered taking microeconomics and macroeconomics. There was also the international marketing subject. One needs to use one's common sense to think about how the world market works. Besides, where's gasoline from anyway?

We need to take a look at the condition during the two presidencies. There are pros and cons on both sides. I believe Andrew J. Masigan did a good job in pointing out some flaws in Duterte's plans in Business World. Masigan later admitted that the Public Services Act of 2022 was "better late than never". However, I take IBON Foundation with a grain of salt. One of their "analysis" on Duterte's administration ended up talking about the prices of gasoline and debt. Has IBON Foundation even thought about two major factors that Duterte had passed through that Noynoy didn't? Noynoy didn't have COVID-19 and the Russia-Ukraine War to deal with. The prices of gasoline are all based on one factor--supply and demand. An economic rule is that if demand is high and supply is low--prices must go up.

A big problem for left-leaning groups is their desire to lower the price of gasoline. Who are they trying to kid? These are the same people who demand the three-step financial suicide--(1) increase wages, (2) lower the prices of goods, and (3) give PHP 10,000 cash assistance for all. If the prices of gasoline were to be sold cheap, just remember that purchasing it doesn't come cheap. The purchase of gasoline was already high. The transportation of supplies is already higher. Gasoline companies will need to sell higher to continue operating. If they were forced to sell lower, you can just imagine the losses gasoline companies will have should the government demand they sell low.

It would all be linked to ignorance. Knowledge about world events can help understand economics. It's pretty like how COVID-19 has caused governments to incur more expenses. Sometimes, you just need to borrow more money. Right now, if supplies of oil are cut off, then gasoline prices are bound to soar. It would help to look at the world market, too since most gasoline supplies are imported.

I think one way to work around this is by welcoming more foreign investment. I would suggest it's time to remove restrictions on exploration, development, and utilization of natural resources. If the Philippines has some oil reserves, it might be time to allow more gasoline refineries in as long as they follow rules. There should be an environmental policy, such as what the late Lee Kuan Yew did in Singapore. Allowing the Philippines to house more utilization of natural resources that is, responsibly usage) will help lower the costs of gasoline in the long run.

References

"2021 Summary of Philippines Foreign Investment Negative List" (May 31, 2021)

https://greenhouse.co/blog/philippines-negative-investment-list-an-up-to-date-summary/

"Why Dutertenomics weakened the economy" by Andrew J. Masigan (July 18, 2021)

https://www.bworldonline.com/opinion/2021/07/18/383210/why-dutertenomics-weakened-the-economy/

"Yes, Russia’s War on Ukraine Did Raise the Price of Gasoline" by Alan Reynolds (April 6, 2022)

https://www.cato.org/blog/yes-russias-war-ukraine-did-raise-price-gasoline-0

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