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Gov’t cushions oil price hike effects

Current price increases are indeed brought primarily by the ongoing increases of the import cost, corresponding value-added tax, and the increase likewise in the price of biofuel component.

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Motorists are tightening their belts to cope with the seven straight weeks of the hefty oil price increases seen trending until yearend.

Thus, the Department of Energy (DoE) and the Land Transportation Franchising and Regulatory Board (LTFRB) will finalize the possible cash assistance that may be distributed to affected motorists in addition to the fare hike or place of the fare hike amid a global oil price hike.

“The DoE has presented already last week to LTFRB the price situation to address their evaluation of the request of the transport sector for a fare hike,” Cusi said in a text message on Tuesday.

“In case fare hike will not be possible or insufficient, the DoE and LTFRB are likewise discussing now the computation of possible additional cash assistance that may be distributed in addition to the fare hike or in place of the fare hike,” he added.

In a separate statement, Transportation Secretary Arthur Tugade reiterated that he wants to pursue other measures to aid the plight of motorists.

“If it’s up to me, I do not want an increase in fares because the majority will be affected by that. I am not fighting the few — I am protecting the many,” Tugade said.

This week, oil companies raised anew their gasoline prices by P1.30 per liter (/L), diesel prices by P1.50/L, and kerosene prices by P1.45/L.

Currently, the year-to-date adjustments stand at a net increase of P16.55/L for gasoline; P15.00/L for diesel; and P12.74/L for kerosene.

“The DoE is currently monitoring and reviewing so that price adjustments implemented by the oil companies are reasonable. The current price increases are indeed brought primarily by the ongoing increases of the import cost, corresponding value-added tax and the increase likewise in the price of biofuel component,” Cusi said.

According to Cusi, oil companies are already implementing discounts and rebates to provide “much lower prices on the ground” to encourage the consuming public to avail of the promotional programs.

“The DoE and the Oil Companies likewise are now engaged on an ongoing discussion of the possibility of providing additional discounts and rebates over and above their existing promotions in response to the continued increase in price,” the energy chief said.

To further protect consumers from the price increase, the DoE is studying the suspension of excise tax, especially when Dubai crude oil reached $80 per barrel.

“Please note that under Section 43 of the TRAIN (Tax Reform for Acceleration and Inclusion) Law, the period of suspension was limited only from 2018 to 2020, thus the period has already lapsed and the excise tax from 2021 onwards can be suspended or repealed only through the passage of a law,” Cusi said.

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