Rappler looks back at the oil crisis of the 1970s to examine what caused it and what measures the elder Marcos used to force energy conservation across the country.
As President Ferdinand Marcos Jr. faces the volatile pump prices that result from continuing geopolitical tensions in the Middle Easthistory provides a stark reminder that the Philippines has been here before.
His father, the late dictator Ferdinand E. Marcos, faced similar problems during the global oil crisis of 1973 and 1979, which showed how international development can quickly translate into domestic economic turmoil.
Rappler looks back at the great oil crises of the 1970s to examine what caused them and what measures the elder Marcos put in place to force energy conservation across the country.
1973 oil crisis: Creation of the Philippine National Oil Company, higher taxes on oil and gas
The 1973 oil crisis began in October 1973 when oil-producing members of the Organization of the Petroleum Exporting Countries (OPEC) imposed an oil embargo on pro-Israel nations during the The Yom Kippur War.
This war saw a coalition of Arab nations, led by Egypt and Syria, launch a surprise military campaign against Israel to regain territory lost during the Six-Day War of 1967. When the United States and other Western allies intervened to provide Israel with the necessary military and financial weapons to counter the attacks, Arab OPEC members retaliated by using oil as a political weapon.
OPEC’s “coordinated strategy” led to a sharp increase in oil prices to $US12 a barrel from around $3. The Netherlands and the United States also faced all the restrictions.
In the Philippines, the crisis exposed the country’s great vulnerability as imported oil accounted for more than 90% of its energy supply at the time, all of which came from Middle Eastern countries that were “in part politically unstable,” according to report and the Japan International Cooperation Agency.
The sudden price shock and supply disruption led to severe fuel shortages, long lines at gas stations, and soaring inflation. Companies laid off workers while the impact on “agricultural development activities and the suspension of industrial activities” also be considered in some areas.
In response, the Marcos administration implemented drastic energy conservation measures. In October 1973, his government increased taxes on gasoline, lubricating oil, and motor diesel gas through Presidential Decree 314. The move at the time was said to be “consistent with the current policy of fuel conservation.”
Marcos also gave Total order 40 which ordered the “strict maintenance” of the four-day work week for government offices as it was already “necessary to order even stricter measures to conserve and distribute available energy resources.” This lasted from November 13, 1973 to April 1, 1974.
The crisis also served as a major catalyst for the creation of the Philippine National Oil Company (PNOC) in November 1973 through. Presidential Decree 334. According to the document, “there is an urgent need for the government to take measures that will help ensure the availability of petroleum to maintain the economic growth and social welfare of the nation.”
PNOC was established to ensure “adequate and stable supply of fuel and petroleum products for domestic needs.” His broad responsibilities also included promoting the “research, exploitation, and development” of natural energy sources, while encouraging operating conditions that support the balanced and sustainable growth of the company.
General Order 41issued in December 1973, it also placed crude and other petroleum products under the control of PNOC.
The restrictions were finally lifted in March 1974.
The second oil shock of 1979: Further energy conservation measures, principles
The 1979 oil crisis was triggered by The Iranian Revolutionwhich disrupted oil production in Iran, which at the time was one of the world’s largest exporters.
This revolution saw the overthrow of Shah Mohammad Reza Pahlavi and the establishment of an Islamic republic under Ayatollah Ruhollah Khomeini. The world’s oil supply in fact it decreased by only about 4%but the disturbance created widespread panic and speculative reservations.
This fear led to a huge increase in the price of oil, which more than doubled around $13 per barrel for around $40 in the next year. Several nations around the world it faced severe supply shortages and severe economic disruption.
The crisis once again exposed the vulnerability of the Philippines to external shocks. During his Address to the Nation in 1979, Marcos said “it is sad that the world has become so dependent on oil that the weaning process seems to be traumatic for many nations in the world.
The Marcos administration implemented a new wave of drastic energy conservation measures. In June 1980, his government was passed National Law No. 73. This action was aimed at “initiating energy conservation to strengthen the availability of energy needed to support the country’s economic, social and developmental goals.”
This law prohibited several activities, including:
- Importation, manufacture, or assembly of heavy goods vehicles, touching gas, especially passenger cars with engine displacement of more than 2,800 cubic centimeters or curb weight exceeding 1,500 kg.
- Use of neon and electric lights for commercials outside of the 6-9 pm peak window. It also banned unnecessary and excessive lighting in hotels, shopping malls and other commercial buildings, except during the Christmas and Ramadan seasons.
- Use of government vehicles for unofficial business and on Sundays, legal holidays, and outside normal business hours. All official journeys required a journey ticket clearly displayed on the windscreen.
It also empowered the government, specifically the then Ministry of Energy, to implement a number of stringent regulatory measures, such as:
- The authority to establish and manage the program of oil allocation and rationing during supply shortages, and also to ensure that traders sell the quality and quantity of oil.
- Require distribution and marketing of renewable energy mix to increase the use of domestic energy resources.
- To prescribe energy consumption standards for all fuel- or electric-powered machines, equipment and vehicles manufactured, imported or sold in the Philippines.
- Adjust the production yield and quality of products of oil refineries in times of shortage and require the industrial and transportation sectors to collect waste for recycling.
- Monitoring of heavy energy users. For example, establishments using more than one million liters of equivalent fuel annually had to submit strict consumption and production statistics while those using more than two million liters had to hire qualified engineers as designated “energy managers” and submit regular energy audits and conservation programs.
- Controlling the use of air conditioning units in offices and commercial buildings and commanding the specific temperature of the thermostat to balance storage and proper comfort.
In order to implement nationwide conservation in times of crisis, the law granted extensive emergency powers to various government ministries:
- The then Ministry of Labor was allowed to compress work weeks or change office hours to reduce congestion and save energy, without cutting workers’ wages.
- The former Ministry of Education was allowed to adjust classroom hours to avoid rush-hour congestion and integrate energy conservation into the curriculum.
- The Ministry of Commerce at that time could dictate the hours of operation of non-essential businesses and entertainment areas, while manufacturers also had to disclose the energy efficiency of their products.
- The former Ministry of Housing was tasked with implementing energy-efficient building designs and planning communities so people could live closer to work and schools.
- What was then the Ministry of Transport and Communications had a lot of control over drivers: they could legally impose “car-free days,” order carpools, restrict driving during rush hour, and even reduce the number of new cars registered each year.
The crisis finally subsided in the early 1980s when world oil consumption declined and non-OPEC countries increased their production. – Rappler.com
