MANILA, Philippines — For the seventh straight week, oil firms are raising gasoline prices, this time by P1.30 per liter, diesel prices by P1.50 per liter and kerosene prices by P1.45 per liter.
Most oil players are implementing the price adjustments at 6 a.m., with Chevron Philippines Inc. adjusting its prices effective at 12:01 a.m. and Cleanfuel raising diesel and gasoline prices starting 4:01 p.m.
At the start of the past trading week, global oil prices rose to a three-year high after the Organization of Petroleum Exporting Countries (OPEC) decided it would maintiain its production level, Reuters reported.
By midweek, oil retreated from multi-year highs due to higher US inventories and the plan to sell oil from its strategic reserves.
But at the close, global oil price recovered and surged as the global energy crunch boosted prices to their highest since 2014 and prompted China to demand increased coal production, Reuters reported.
Before these price changes take effect, year-to-date adjustments stand at a net increase of P16.55 per liter for gasoline, P15.00 per liter for diesel and P12.74 per liter for kerosene.
Energy Secretary Alfonso Cusi said the Department of Energy (DOE) is studying measures – including the suspension of excise tax – to protect consumers from massive fuel price hikes.
“Suspension of excise tax, it needs a law,” Cusi said in a text message to The STAR.
He was referring to a mechanism under the Tax Reform Acceleration and Inclusion (TRAIN) Law that would automatically suspend excise tax on refined oil products if the world price of crude would average $80 per barrel for three consecutive months.
“This needs to be repealed through a passage of a law. We are studying this,” Cusi said.
Starting January 2018, the TRAIN Law imposed higher excise tax on gasoline from P4.35 per liter to P7 per liter and new tax rates of P2.50 per liter on diesel, P3 per liter on kerosene and P1 per kilogram on liquefied petroleum gas (LPG).
In January 2019, a higher excise tax was imposed on gasoline to P9 per liter, on diesel to P4.50 per liter, on kerosene to P4 per liter and on LPG to P2 per kilogram.
In a separate text message to The STAR, Finance Secretary Carlos Dominguez III said his department will check the revenue impact on the DOE’s proposal.
“Under the TRAIN what was allowed to be suspended, upon recommendation of the DOF (Department of Finance), was the annual increases of rates (which ended in 2020) and only if the Mean of Platts Singapore (MOPS) for Dubai Crude in the last three months far exceeded $80 per barrel. We will check the revenue impact, assuming it can be done,” he said.
Serving as the benchmark for local fuel products, the MOPS is the daily average of all trading transactions of diesel and gasoline as assessed and summarized by Standard and Poor’s Platts, a Singapore-based market wire service.
The DOE, together with its partners and stakeholders, provided mitigating measures to help consumers cope with the effects of the TRAIN Law during its first implementation, such as fuel discounts through corporate social responsibility and promotional programs, Pantawid Pasada, energy efficiency tips and rigorous monitoring of gas stations to ensure good quality and right quantity of petroleum products.
In October 2018, senators urged the President to suspend the increases in excise taxes on petroleum products for 2019 and 2020 as mandated by the TRAIN Law.
At the time, international oil prices breached the $80 per barrel level, to which the TRAIN Law stated that the 2019 increase in excise tax in fuel can be suspended if the three-month average price of Dubai crude reaches at least $80 per barrel. – Elijah Felice Rosales