DOE keeps close watch on remaining 2018 oil inventories

Published December 28, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/12/28/doe-keeps-close-watch-on-remaining-2018-oil-inventories/

Prior to the implementation kick-off of the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) Act this New Year, the Department of Energy (DOE) assured the public that it will prudently validate the level of inventories first of the oil companies.

That shall be in reference to the remaining stock of petroleum products still purchased in 2018, hence, these must not be covered by higher excise taxes that are due for 2019.

In a directive to the oil companies, the energy department indicated that they must “empty first their 2018 oil inventories before applying the second round of excise tax to petroleum products.”

In counterchecking the level of inventories of the oil firms,  Energy Secretary Alfonso G. Cusi noted that his department collaborates closely with the Department of Finance (DOF), as well as with the Bureau of Customs (BOC) and the Bureau of Internal Revenue.

The second tranche of increases in excise taxes underpinned by the TRAIN Law is set for enforcement on January 1, 2019 – but since there would be remaining inventories, these shall not bear yet the higher taxes.

Cusi qualified “we are ready to implement the second tranche of TRAIN, which imposes additional excise taxes to various commodities like petroleum products by New Year.”

The energy chief stressed “with the imposition of the additional excise taxes, we are stringently looking at the 2018 inventories of oil companies in order to protect consumers from unjust trading and profiteering once the second tranche is operationalized.”

Cusi further explained “the sale of old stocks, referring to the remaining balance of the inventory ending December 31, 2018, which was not covered by the second tranche of excise taxes should not be collected from the consumers.”

Otherwise, according to Cusi, that constitutes violation of the TRAIN Act, and that warrants “not only administrative penalties like closure of the establishment will be imposed; but also the criminal penalty of large-scale estafa.”

The Duterte Cabinet first considered deferring the second round of excise taxes, but had that plan scrapped when global oil prices started hitting new lows again around October of 2018.

Cusi emphasized the new tax charges need to be implemented “because the new collection will be used to support our ‘Build, Build, Build’ programs, free tuition and medical assistance for our kababayans.”