Oops, not so fast Pump stations were sternly warned by Energy Secretary Alfonso Cusi to keep off, at least until the middle of January, from tagging higher excise tax on old inventory. CONTRIBUTED PHOTO

President Rodrigo Duterte’s economic team led by Energy Secretary Alfonso Cusi moved swiftly yesterday to prevent profiteering after the second tranche of the excise tax increase on oil products took effect, with oil distributors being warned of closure.

We have reached out to our stakeholders, especially the oil companies, for their cooperation

The decisive act on retailers seeking to take advantage of the reform law also won praises from legislators.

The implementation of the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) law took effect 1 January 2019 that raised excise tax on fuel, but the Department of Energy (DoE) said retailers are not allowed to use the new excise tax rates on their 2018 inventory.

Under the TRAIN law, an additional excise tax of P2 will be imposed on diesel and gasoline and P1 per kilogram on LPG (liquefied petroleum gas).

The DoE had started strict monitoring of gasoline stations and, on Thursday, it directed six fuel retail stations to explain their pricing that carried the new tax increase even before their inventory from last year have yet to be consumed.

We will ensure the fuel stocks for 2018 will be utilized first and sold at the pre-implementation prices

The DoE assured the public it has taken measures to prevent abuse and ensure fair and effective implementation of the taxation scheme.

“The Department of Energy is mandated to ensure that the pricing of oil products is carried out within the parameters of the TRAIN Law,” Energy Secretary Alfonso Cusi said in a statement.

If you violate the law, there are administrative sanctions.

“Over the process of the implementation of the first tranche of the TRAIN Law, we have reached out to our stakeholders, especially the oil companies, for their cooperation and we will continue our coordination with them throughout the second tranche,” Cusi added.

Sen. Win Gatchalian lauded the DoE for its swift action against the reported premature increase in the prices of fuel by some gasoline stations citing the imposition of the second tranche of the fuel excise tax.

Gatchalian, chairman of the Senate committee on energy, stressed gasoline stations could not impose additional prices less than 15 days after the imposition of the tax under the TRAIN law.

He said gas companies are mandated to have minimum stocks that will last for 15 days, so they cannot as of yet increase prices.

Finance Assistant Secretary Tony Lambino said abusive gas stations may be ordered closed.

Lambino said retailers may only implement the excise taxes when all of their inventories from 2018 have been exhausted.

“If you violate the law, there are administrative sanctions, including closure or revocation of license,” Lambino said.

“We can even file criminal charges such as estafa, so we are expecting all will follow (the correct process),” he added.

Lambino advised motorists to report gasoline stations selling products at suspicious prices.

“Report to the DoF Facebook page if you notice some irregularities and we will transmit these to the authorities, in this case, the DoE,” he said

Cusi said the DoE will be more vigilant in monitoring the implementation of the second tranche of the TRAIN Law for petroleum products.

“We will ensure the fuel stocks for 2018 will be utilized first and sold at the pre-implementation prices,” the Energy chief said.

The Department of Energy is mandated to ensure that the pricing of oil products is carried out within the parameters of the TRAIN law.

The DoE said a series of price rollbacks over the past few weeks had significantly brought down prices and that any increase as a result of the new taxes would still be smaller than the net price decreases for 2018.

While there is an uptick in the price of oil in the world market, Cusi pointed out that industry forecasts do not see crude oil prices hitting record high such as in October 2018 when the price of Brent crude oil breached the $80 per barrel level.

“If the trend continues, we do not expect it to have as much impact on fuel prices as it did last year. Besides, we can cushion the effect of new oil price increases by becoming more efficient in our use of energy,” he added.

Through the E-Power Mo program, the DoE has been providing the public with tips for an energy-efficient lifestyle, particularly in the use of fuel and electricity.

“We might have to spend a little more, but that little sacrifice would translate to huge benefits for the country,” Cusi said.

“Let us remember that the revenues from the TRAIN will fund important programs, such as free education and an increase in the salaries of our men in uniform, public school teachers, as well as crucial infrastructures under the ‘Build, Build, Build’ program that would sustain our economic growth and provide jobs and livelihood opportunities for our people,” he explained.

“Gas stations are mandated to store oil for 15 days, that’s why they cannot increase prices,” Gatchalian said.

“I noticed the DoE was quick. They were monitoring gas stations and they issued warning because they raised prices. There are really those who are taking advantage, because our consumers are not well-informed about it,” he added.

The DoE stressed that fuel retailers are not allowed to use the new excise tax rates on their 2018 inventory even if the second round of excise tax increase took effect on Tuesday, 1 January.

“The licenses of those who are taking advantage can be revoked and they can be charged,” Gatchalian said.