Palace confident of no oil shortage due to Shell, Customs tax squabble

MANILA, Philippines - Malacañang expressed confidence yesterday that there would be no problem with the supply of oil in the country as a result of the legal squabble between Pilipinas Shell and the Bureau of Customs (BOC).

In an interview over Radyo ng Bayan, secretary to the Cabinet Silvestre Bello III assured that the concerned authorities are on top of the situation, particularly Energy Secretary Angelo Reyes.

Bello said that there was no need for President Arroyo to interfere in the matter at this time because this can be settled without any impact on the supply of oil in the country.

Calls have been made for the President to step into the case between Shell and the BOC involving the alleged non-payment of P7.3 billion in excise taxes from the importation of catalytic crack gasoline and light catalytic crack gasoline.

Shell has argued that the imported products were used as raw materials for the production of unleaded gasoline and should not be imposed excise taxes.

However, the BOC has insisted that the imports were unleaded gasoline products and should therefore, be subjected to the excise tax.

The BOC has threatened to seize the future imports of Shell to cover for the P7.3 billion it allegedly owes the government.

Shell, for its part, has warned that this move by the BOC could force them to close their refinery. The company pointed out that without the raw materials needed for its refinery, it would be left with no recourse but to shut down.

If Shell closes its refinery it would have a direct impact on the local supply of fuel since it is one of only two refineries in the country the other one belonging to Petron Corp.

“Well we have Secretary Angie Reyes who is handling the situation and I am very sure and very confident that the issue will be resolved in a manner that will prevent any shortage of gasoline or oil supply in our country,” Bello said.

Customs to hold future shipments

Meanwhile, Customs Commissioner Napoleon Morales said they would still hold future oil shipments of Shell or else they would be accused of violating the law.

Morales yesterday said that he would not allow threats of Pilipinas Shell Petroleum Corp. (PSPC) to pressure him and would still put on hold all its future shipments if it continues to refuse to pay the P7.3 billion excise tax.

Morales accused the oil firm of “blackmailing” the government and that “we would pursue with the implementation of section 1508 of the Tariff and Customs Code of the Philippines (TCCP) because if we don’t, it would be in violation of the law. It is the duty of the government to implement the law.”

Morales was reacting to news reports wherein Shell reportedly said that it would have to close down its refinery if the BOC would seize their raw materials, the catalyctic crack gasoline (CCG) and light CCG (LCCG). Shell claimed that the products being taxed are raw materials and thus exempted from excise tax.   – With Evelyn Macairan