The government is studying the possibility of suspending the collection of excise taxes on petroleum products as global oil prices rise, the Palace said Monday.
Presidential spokesperson Secretary Harry Roque said authorities will evaluate the proposal of transport groups and other sectors as fuel costs threaten to increase the prices of basic goods and services.
“As we speak, this matter is being discussed,” Roque said in his televised briefing. “We are considering this proposal. The government is heeding and we are evaluating.”
Oil prices reportedly spiked between 7.02 percent for high-octane gasoline and 15.61 percent for diesel from August to October, much higher than the 0.21 percent and 3.97 percent increases from June to August.
The suspension of taxes on petroleum prices will reduce costs by 25 percent, assuming gasoline prices at P70 per liter, Infrawatch PH convener Terry Ridon stated.
Aside from the rise in oil prices, the Duterte administration’s Tax Reform for Acceleration and Inclusion (TRAIN) Law also slapped duties amounting to P10 per liter on gasoline and P6 per liter on diesel. The law currently has no provision that can automatically reverse the imposition of taxes.
The Department of Finance has recently warned that suspending the imposition of excise taxes may result in a “substantial revenue loss” of up to P131.4 billion in 2022, thus affecting the government’s pandemic response budget.
Energy Secretary Alfonso Cusi said the spike in domestic oil prices was due to the prevailing Oil Deregulation Law and import dependence that tied the hands of the government.
“With the continuous oil price hike that is happening now, we really have nothing left to do because we are at the mercy of importers. We are only importing our oil requirements. For the meantime, we have to bear with the rising crude oil prices,” Cusi said in a radio interview.
“This is why we cannot influence the domestic prices of oil. The only way for us to do that was to unbundle fuel prices by amending the oil deregulation law,” he added.
For nine consecutive weeks, oil companies jack up their pump prices beginning today, 26 October.
The price of gasoline will increase by P1.15 per liter, diesel by 45 centavos per liter, and kerosene by 55 centavos per liter.
Chevron Philippines, Cleanfuel, Metro Oil, Petro Gazz, Pilipinas Shell, PTT Philippines, and Seaoil announced the price adjustment yesterday.
“Some have been saying that there is a cartel happening among oil companies. The Philippine Competition Commission is looking into that. Now, the mechanism of adjusting oil price every Tuesday is strictly followed,” Cusi pointed out.
Fuel firms usually announce price adjustments every Monday to be implemented the following morning.
P1-B up for distribution
Transport groups have since called on the government to impose measures to control oil prices amid the pandemic, saying the marginalized sectors will be badly hit if the costs of food and other necessities also increase.
Now being looked at are possible subsidies and fuel discounts as proposed by Senator Christopher Lawrence “Bong” Go, a vice-presidential contender representing PDP Laban.
Subsidies, Go said, can be arranged by the Departments of Agriculture (DA), Transportation (DoTr), and Energy (DoE) to help the strategic sectors cope with the rising fuel prices.
While Congress has yet to act on the proposed amendment to the Oil Deregulation Law, the Development Budget Coordination Committee (DBCC) has moved to release P1 billion in financial assistance to public utility vehicle drivers affected by the spike in pump prices.
In a statement, the DBCC said the cash grant for 178,000 recipients will be distributed through the Pantawid Pasada Program in the remaining months of the year.
The fund will be sourced from the unprogrammed appropriations under the 2021 national budget for support for infrastructure projects and social programs.
To provide economic relief to drivers and operators, transport groups have been appealing for P2 to P3 increase in jeepney fares.
with MARIA ROMERO