Motorists need to tighten their belts this week following another round of big-time hikes in oil prices.
In separate advisories on Monday, Caltex, Cleanfuel, Pilipinas Shell, PetroGazz, Uniol, and Seaoil announced a P1.80 per liter price increase of diesel and P0.90 per liter price hike in gasoline effective today, 18 January.
The oil firms will also implement a hefty P2.30 per liter increase in kerosene prices for the rest of the week.
Only a week ago, the local pump prices of petroleum products were on a hike.
Fuel firms usually announce price adjustments every Monday to be implemented on the following day’s morning.
To recall, the Department of Energy has been calling to suspend the excise tax on fuel as a reprieve for consumers.
However, the Department of Finance (DoF) negated that the proposed suspension of the excise taxes on fuel will be inequitable.
In one of his economic bulletins, Undersecretary and Chief Economist Gil Beltran explained that the suspension could lead to significant revenue losses, thus threatening the country’s recovery and growth prospects.
“The unrealized public spending and investments from the foregone revenues will be detrimental to our economic recovery and long-term growth,” he said.
“A more equitable way to address the impact of higher fuel prices is to provide targeted support to the vulnerable groups, particularly the transportation sector, which the government has already committed to doing.”
The DoF estimated that suspending all fuel excise taxes and value-added tax (VAT) on fuel excise will result in foregone revenues amounting to P147.1 billion or around 0.7 percent of the gross domestic product (GDP) in 2022.
If the tax suspension covers only the fuel excise taxes and the VAT on fuel excise under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the government is estimated to lose P119.5 billion or around 0.5 percent of GDP in the same year.