Customs to implement fuel-marking next year

Published October 26, 2016, 10:00 PM By Chino S. Leyco

http://business.mb.com.ph/2016/10/26/customs-to-implement-fuel-marking-next-year%E2%80%A8/

The Bureau of Customs wants to implement anew a fuel-marking scheme next year to curb rampant oil smuggling in the country.

Customs Commissioner Nicanor E. Faeldon said yesterday the government is determined to implement the fuel-marking system within the first-quarter next year despite the strong opposition from the oil industry.

“It was never implemented because of the lobbying,” Faeldon told reporters. “But if we will do that it will just be around 6 centavos (R0.6) per liter then we can stop smuggling, we can monitor up to the last liter of fuel that’s being brought into the country.”

Faeldon disclosed that Customs currently has no capability to accurate account all oil importations.

“Right now we cannot definitively account the volume of fuel we have in the country. That marking will give us an accurate data on how much volume of fuel was brought into the country,” the commissioner said.

Faeldon said that Customs held consultations with the stakeholders and assured the industry that the R0.6 cost of fuel marking would remain the same in the next 10 years.

The Department of Finance is also supporting the planned fuel-marking scheme, which will cover all fuel products, whether locally refined or imported, Faeldon said.

Fuel-marking scheme was first introduced during the Arroyo administration but was discontinued in the middle of former President Benigno S. Aquino III’s term.

Former Customs Commissioner Alberto D. Lina had attempted but failed to reintroduce the fuel-marking system in the country that should have covered locally refined and imported oil products.

“For the entire country, there’s an estimate that fuel-marking system would cost us $25 million, but the potential tax revenues, once implemented, is estimated to reach $300 million,” Lina said in July last year,

During the Arroyo administration, the fuel-marking system only covered the duty-free fuels. The government had tapped Swiss inspection services provider Societe Generale de Surveillance (SGS) for its fuel marking.

In a Department of Finance Order 23 issued in 2007, the Customs bureau was tasked to carry out mandatory marking of imported kerosene and fuel that enter tax and duty-free to prevent diversion to the domestic market.

There were reports at that time that tax- and duty-free articles have subsequently entered the domestic market illegally without payment of the proper duties and taxes that resulted in huge revenue losses to the government and legitimate oil companies.