DoE: Use of fuel tax won’t spill

On June 18, 2020 04:00 AM By Maria Romero

https://tribune.net.ph/index.php/2020/06/18/doe-use-of-fuel-tax-wont-spill/

The Department of Energy (DoE) vowed to ensure the proper implementation and use of the additional tax on crude and petroleum products as provided in Executive Order (EO) 113.

DoE Secretary Alfonso Cusi on Wednesday said he instructed the DoE-attached Oil Industry Management Bureau (OIMB) to come up with the strict guidelines that will govern the enforcement of the order.

President Rodrigo Duterte last 2 May signed EO 113 temporarily imposing an additional 10 percent import tax on petroleum products to help augment government funding in the fight against the dreaded coronavirus disease.

These higher rates should be effective as long as Republic Act 11469 or the Bayanihan to Heal as One Act is in effect, or when Dubai Crude reaches $64 per barrel of oil, whichever comes earlier.

However, Cusi clarified that the additional tax should only be reflected in price adjustments only after oil companies have exhausted existing inventories purchased before the issuance of EO 113.

Priority is consumer welfare
“Protecting our consumers is always our top priority. We will not allow any unfair practice to derail consumer interests, especially given the challenges we continue to face the pandemic,” Cusi explained.

Shell Philippines recently reported that 644 of their liquid fuel retail outlets have implemented the tariff adjustment for diesel products only, with this week’s adjustments generally reflecting upward developments in the global oil markets.

Cusi likewise noted that even with the additional P1.50 to P1.60 per liter tariff range, prices of petroleum products are still low.

Cumulative rollbacks from January this year to date stand at P6.72 per liter for gasoline, P9.99 per liter for diesel, and P13.69 per liter for kerosene.

Pass-on needs okay
Projections based on DoE inventory reports showed the added costs might be included beginning the third week of June.

The Energy Regulatory Commission (ERC), for its part, spelled out that the oil price adjustment will not immediately reflect in the consumers’ electricity bills as pass-on charges to consumers would still require their approval.

Meanwhile, data from the Department of Finance (DoF) showed that EO 113 has so far raised an additional P1.1 billion in tariff and P130.1 million in value-added tax (VAT) from imported crude oil since May — that’s P1.49 billion added government fund.

For liquefied petroleum gas (LPG), the additional import tax raised P252.7 million, and another P30.3 million from VAT.

Across oil imports covered by the order, additional collections in May amounted to P973.9 billion, while the take so far this June reached P523.2 billion.

The added tax on crude and petroleum was earlier estimated to generate as much as P20 billion in supplemental fund for the government, which could be used to bankroll Social Amelioration Program and other safety nets extended to poor households and displaced workers.