Guv to P-Noy: Lower VAT on fuel products

BACOLOD CITY, Philippines —The one-month fuel subsidy of the government for public utility vehicles to contain the rising prices of oil and petroleum products, is not enough and will not solve the problem.

This was the statement of Negros Occidental Governor Alfredo Maranon Jr. as he urged President Benigno Aquino III and Congress to provide long-term solutions, foremost of which is reducing the value added tax (VAT) on oil and petroleum products.

Maranon said the reduction of VAT on fuel products needed the approval of Congress because it is a law, and in case the legislature moves for such, he would support it.

The president can call for a special session of Congress to seek a cut on the VAT on fuel, or legislators could tackle the matter when Congress resumes session after Holy Week, Maranon said.

"As much as possible we have to lower the price of our fuels. But considering the high price of oil in the world market, they (lawmakers and oil companies) can only reduce that to a certain amount. The point is, oil companies should consider lowering their profits," he told The Freeman.

In a meeting Wednesday night, he was asked about the failure of Energy Undersecretary Jose Layug Jr. to address the concerns of Negrenses on the fuel price disparity here compared with other provinces, and he replied: "We have been asking the same thing from the DoE many times already. It seems they are just fooling us. They should give a definite answer to our request, whether it's a yes or a no, and not take us for a ride."

Maranon said the Provincial Board might approve another resolution asking the DoE to intervene in the lowering of fuel price disparity in the province. The business and transport sectors have been complaining that prices of fuel here are higher by P4.50 to P5 per liter than those in the National Capital Region and other regions.

Last week, Aquino said the government will allocate as much as P500 million for a one-month fuel subsidy for PUVs as a "stop gap measure" from the effects of high oil prices. He said he approved a draft executive order that will give so called "fuel assistance smart cards" to jeepney and tricycle operators with valid franchise from the Land Transportation Franchising and Regulatory Board.

Jesse Ortega, secretary-general of the United Negros Drivers and Operators Center, however dismissed this move as inutile in solving the continuing rise in fuel prices. One solution instead is for government to scrap the E-VAT Law that will immediately lower petroleum prices by more than 12 percent.

Meanwhile, the DoE is reportedly suggesting that government agencies cut their gas consumptions by 10 percent to help solve the problem.

Maranon said it could be helpful but it all boils down to individual consumers, not just government agencies. "Perhaps the DoE should also see that most of our vehicles and equipment are very old and they consume more fuel than modern models do," he said.

"There are new equipment and vehicles now that consume lesser fuel. Like the US airlines, they now consume one-third of their old consumption. Bu then we have to invest in new models of vehicles and equipment. The question is, do we have a budget for that?" Maranon said.

"Presently, our farm trucks used in sugarcane are very old, which consume more fuel. Can the farmers afford to buy brand new ones?" he added. "There are new vehicles and equipment with engines that consume less fuel. For me, having this new equipment is the best fuel-saving device," said the governor.