Gas stations that used TRAIN to hike prices of old stock face closure

By Lenie Lectura - January 18, 2018
https://businessmirror.com.ph/gas-stations-that-used-train-to-hike-prices-of-old-stock-face-closure/

The government has, so far, identified at least 20 gasoline stations that likely took advantage of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act in January by selling old inventories at prices reflecting the impact of the new tax law, the Department of Energy (DOE) said.

Energy Assistant Secretary Leonido Pulido III said the agency was able to validate that “there were 20-plus retail stations that jacked up their prices from January 8 to 12.” He, however, did not identify the oil firms whose dealers received show-cause letters from the DOE. The agency has given them until January 22 to respond why they should not be sanctioned. Violators, Pulido added, would lose their certificates of compliance and business permits. The DOE will conduct a random inspection of all 6,800 gasoline stations to verify whether the excise tax under the TRAIN Act is being properly imposed. It has told oil companies to submit a daily summary of stock withdrawals starting January 1, 2018, until the depletion of the declared inventory as of end-2017.

Based on January 15 DOE data, there are 245 Petron stations of the 1,845 total Petron stations that already implemented the oil excise tax starting from January 8 to 12; 408 of the 1,119 total stations for Shell from January 5 to 11; and 178 of the total 834 stations for Caltex.

Energy Secretary Alfonso G. Cusi also called a meeting with distribution utilities to discuss the effective and appropriate implementation of the power-related provisions of Republic Act 10963, or the TRAIN.

Specifically, the major items that were discussed are the adjustments due to (a) the value-added tax on the transmission sector; (b) the VAT on the Cooperative Development Authority-registered electric cooperatives; and (c) the excise tax on coal and diesel that are used to fuel power plants.

“We will look into coal contracts and scrutinize provisions as to whether there is a provision on pass-on excise tax,” Cusi said.

He added the meeting would examine the submissions of coal-fired power plants to the Electric Power Industry Management Bureau. “Corollary, the DOE has directed all distribution utilities to require from their power suppliers the basis of any additional charges that may emanate from the Train law. This includes the explanation on the implementation of excise taxes vis-a-vis the minimum inventory requirement for both coal stocks and diesel stocks,” Cusi pointed out.