Palace willing to restore OPSF amid volatile prices

Because of the rising price of oil in the world market, Malacañang is warm to a proposal in Congress to restore the Oil Price Stabilization Fund (OPSF), Executive Secretary Ronaldo Zamora said yesterday.

Zamora told a radio interview that the OPSF, which was crafted by the late dictator Ferdinand Marcos, was a great buffer against volatile changes in the price of world crude.

But he said this oil price subsidy scheme may not be feasible at this time because the government has no money to start this fund.

The OPSF actually gets the money from consumers of gasoline and other petroleum products. It also feeds on contributions by local oil companies when the price of crude is down.

However, the fund was abolished when the Oil Deregulation Law was enforced.

Meanwhile, the Department of Justice said not all new players in the deregulated oil industry can avail of a six-year income tax holiday (ITH).

Justice Secretary Artemio Tuquero said that for the new oil players to avail of this incentive, they must prove that they are "engaged in a pioneering activity."

"For an enterprise registered pursuant to Republic Act 8479 (Oil Deregulation Law) to avail of the six years ITH under Article 39 (a) of the Omnibus Investments Code, it must prove to be engaged in a pioneer activity," he said in an eight-page opinion.

The justice department's opinion was sought by the Board of Investments after it found a law regarding VAT exemptions for local oil companies vague.

The BOI likewise said it was at a loss on what rule to apply regarding income tax holidays, considering there is a provision in the Oil Deregulation Law that new players in the industry can enjoy such holidays for five and not six years.

Tuquero said oil companies cannot avail of tax exemption because "exemption from taxation is never presumed."

"Where the law intends to grant a tax exemption, it says so in clear, express and unmistakable terms," he said.

"As a general rule, if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation, in consonance with the plain-meaning rule," Tuquero said.