Consumers yet to feel impact of oil tariff cut - Shell head

MANILA, Philippines - The impact of the tariff reduction on imported petroleum products has yet to be felt by consumers, a top oil company official said.

Pilipinas Shell Petroleum Corp. country chairman Edgar Chua told reporters over the weekend that as far their company is concerned, there is still no signed guideline for the implementation of the tariff cut.

“We will implement once it is signed,” he said when asked if the tariff reduction was already factored in in current domestic oil prices.

But once implemented, Chua said oil consumers will immediately enjoy a 70-80 centavo price cut.

“Theoretically, the impact will be on the cost. It will go down. If price of diesel, for instance is $80, three percent of that is divided to three so that would be a 70-80-centavo reduction,” he said.

Chua, however, said some firms may have been reflecting these cuts in their current prices.

“I think a number of parties have already been reflecting the lower cost, so we’ve been matching,” he said.

The Shell executive said this computation may vary depending on the price of petroleum products when the tariff cut is implemented.

“It could be more, it could be less. But the reduction in cost will definitely be reflected in the market,” he said.

Executive Order 850 was signed by President Arroyo last Dec. 23 and took effect Jan. 1, 2010, lowering the tariff on imported petroleum products from three percent to zero.

The tariff cut was consistent with the implementation of the ASEAN Trade in Goods Agreement (ATIGA) in January 2010, which calls for zero tariff on imported finished pump products from the Philippines, Indonesia, Malaysia, Thailand, Singapore and Brunei. 

Despite Malacañang’s approval, the actual order of its implementation has yet to be fielded out.

For his part, Energy Secretary Jose Ibazeta said they also expect a reduction in local pump prices down once the tariff cut sets in.