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Why fuel prices in Tawi-Tawi are much lower compared to the rest of the country

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ABS-CBN News

<figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2089183" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div><p>MANILA — Fuel prices in Bongao, Tawi-Tawi, in the southern Philippines, are at around P65 per liter. </p><p>Meanwhile, in Quezon City, some gas stations sell diesel at around P89 per liter. In Borongan, Eastern Samar, the price of diesel has already reached around <a href="https://news.abs-cbn.com/news/06/21/22/presyo-ng-diesel-sa-eastern-samar-nasa-p100litro-na">P100 per liter</a>. </p><p>So how does Tawi-Tawi manage to keep petrol prices low despite the nonstop <a href="https://news.abs-cbn.com/business/06/18/22/diesel-prices-estimated-to-go-up-nearly-p3liter">oil price hikes</a>?</p><p>Former assemblyman Sulay Halipa, the economic consultant of the provincial governor of Tawi-Tawi, said that bartering with Sabah, Malaysia has helped them source cheaper petroleum. </p><p>But he denies that this is a form of smuggling, saying that the province has historically been trading with the country&#x27;s neighbors like Malaysia, Indonesia, and Brunei.</p><p>Halipa said that during the barter, which takes 2 to 3 hours of travel to Sabah, they bring seafood products in exchange for oil.</p><p>&quot;We&#x27;re just bringing gallons-gallons na mga 20 liters each pagdating nila doon, doon sila bumibili sa Malaysia (as they arrive there, they buy oil in Malaysia),&quot; he told ABS-CBN&#x27;s TeleRadyo on Wednesday.</p><p>The former assemblyman said that they were able to get low-cost petroleum because Malaysia&#x27;s fuel products are being subsidized by their government. </p><p>On the other hand, gas in the Philippines is more expensive because of excise tax and VAT, he said.</p><p>In its <a href="https://www.eia.gov/international/content/analysis/countries_long/Malaysia/malaysia.pdf">Jan. 2021 report</a>, the US Energy Information Administration said that as of 2019, Malaysia was the second-largest oil and natural gas producer in Southeast Asia. </p><div><strong>ILLEGAL OR NOT?</strong></div><p>Halipa admits that some residents are being apprehended by authorities because of the practice, citing the Philippines&#x27; oil deregulation law. </p><p>But despite this, he said they still encourage the barter system with Sabah and called for the liberalization of the fuel industry, especially in provinces like them that are near Malaysia.</p><p>&quot;It&#x27;s also the initiative of the local government kaya hinihingi namin to liberalize it. &#x27;Pag hinuhuli nila &#x27;yung mga ganyan doon tumataas ang presyo namin (that&#x27;s why we request to liberalize it. Every time they stop the barter that&#x27;s when gas prices start to increase),&quot; he said, adding that gas prices last month in the province had reached P120 per liter. </p><p>Talks of having actual trading — not just barter — between Tawi-Tawi&#x27;s Bongao and Malaysia&#x27;s Lahad Datu are now underway, Halipa also said. </p><p>&quot;Kung maipasok namin ang fuel magiging stable na ang fuel namin in Tawi-Tawi,&quot; he explained.</p><p>(If we can manage to bring fuel [from Sabah] its prices in Tawi-Tawi will become stable.)</p><p>&quot;To tell you frankly even if we will not buy a single drop of fuel from Zamboanga, single grain of rice from Zamboanga or Iloilo, hindi kami makakaapekto po sa ekonomiya ng Pilipinas (we cannot affect the Philippines&#x27; economy),&quot; Halipa claimed.</p><div><strong>—TeleRadyo, June 22, 2022</strong></div>

Fuel prices in Bongao, Tawi-Tawi, in the southern Philippines, are at around P65 per liter. 