‘Suspend fuel excise tax amid Middle East tension’

MANILA, Philippines — If push comes to shove, the Duterte administration can suspend the government’s collection of excise taxes on fuel and other imported products to cushion the impact of the US-Iran tension and the new round of oil price increases.

“If need be, the tax can also be suspended for other oil imports on a calibrated basis. To cushion any inflationary impact, the government can suspend, at the right time, the excise tax on fuels which are part of the reserves,” House Deputy Speaker Mikee Romero said. 

He pointed out that “tariff and taxation laws give the President enough leeway for various temporary calibrations” even as he reiterated his proposal to put up a “National Strategic Fuel Reserves” in the event of situations like this. 

Romero also suggested to the Department of Energy (DOE) to order local oil companies, both big and small players, to raise their fuel reserve inventories to at least 30 days, which may be a “temporary measure” to lessen the effect of price increases to the masses. 

This is aside from pushing the swift approval of House Bill 4689, which aims to create the Philippine Strategic Fuel Reserves and Fuel Price Stabilization Act. 

“Alarmist speculations only serve to create needless anxiety. I call for calm and reasoned observation. Given the developments in Iraq and Iran, the proper stance is staying the course in our good relations and people-to-people ties with both countries,” Romero said.

He added that “while there may be historical parallels and similarities between what is happening now with what was happening in the ’70s and ’80s, the similarities end there (because) the world is no longer as dependent on OPEC oil as it was in the ’70s and ’80s.”

Meanwhile, oil firms said in separate advisories that prices for diesel and kerosene would be increased while that of gasoline would be reduced today.

Diesel will cost P0.40 more per liter while kerosene will also go up by P0.30 per liter. Prices for gasoline will be reduced by P0.10 per liter.

Chevron Philippines Inc., which operates Caltex stations, said its price adjustment would take effect starting 12:01 a.m.

Petro Gazz, Phoenix Petroleum Philippines, Pilipinas Shell Petroleum, PTT Philippines and Seaoil Philippines said their price adjustments would also take effect at 6 a.m. today.

Cleanfuel will adjust its prices at 12:01 a.m. tomorrow.

This is the fourth consecutive week that diesel and kerosene prices were raised.

Global oil prices steadily rose in the past trading week amid optimism over a China-US trade deal, ongoing supply cuts from major oil producers and fears over escalating conflict in the Middle East after an airstrike by the US that killed a top Iranian military commander in Iraq.

However, price adjustments do not yet include the increase in excise tax.

By Jan. 1, 2020, an additional P1.50 per liter is to be implemented as part of the last tranche of excise tax increases under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

DOE Undersecretary Jesus Posadas said the third and last tranche of excise tax on fuel will proceed as planned but oil companies have to dispose of old stocks first before imposing the new taxes. He explained that the new excise tax rates do not apply to the old stocks of petroleum products and should not be charged by retailers to consumers.

“That’s always the protocol. They have to finish their old inventory… both imported and produced by the refinery… before imposing the additional excise tax,” he said.

The DOE said oil companies have a minimum inventory of 15 days. Oil companies periodically submit their inventories to the DOE to give them an idea on their stockpile.

Last week, oil firms implemented an increase of P0.85 per liter on gasoline, P0.50 per liter on diesel and P0.35 per liter on kerosene.

This brought the year-to-date adjustments to stand at a net increase of P7.32 per liter for gasoline, P5.81 per liter for diesel and P2.61 per liter for kerosene. – With Danessa Rivera