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DOE: Gas, diesel prices up, excise tax only for new stocks
As the New Year arrived, petroleum companies announced a 20-centavo-per-liter increase in gasoline and a 65-centavo hike in diesel pump prices while no movement was reported on kerosene prices, the Philippine News Agency reported.
Shell, Seaoil, PTT Philippines, and Phoenix Petroleum will implement the adjusted costs at 6 a.m. on Tuesday, January 2.
Meanwhile, the Department of Energy (DOE) advised the public that the implementation of value added tax (VAT) for petroleum products under the Tax Reform Acceleration and Inclusion (TRAIN) takes effect on January 1, 2018.
The DOE, through the Oil Industry Management Bureau (OIMB) and in coordination with the Department of Finance (DOF), reminds the public that the new excise tax rates do not apply to the old stocks of petroleum products and cautions retailers not to charge the new excise tax on the consumers.
“The OIMB has issued an advisory to petroleum products stakeholders not to levy new excise tax rates on old stocks, considering that excise taxes are levied upon importation and not at the point of sale to the consumers,” Assistant Secretary Leonido Pulido III clarified.
Under the TRAIN, the new rates that are applicable to consumers include pump price of gasoline, diesel, and kerosene for newly acquired fuel stocks.
The DOE also reminds the public that the price freeze for household liquefied petroleum gas (LPG) weighing 11-kilograms (kg) and under and kerosene are automatically implemented for a period of 15-days from the time an area is declared under a state of calamity.
Through the OIMB and the agency’s field offices, the DOE is closely coordinating with the oil industry players in the implementation of the Republic Act (RA) 7581, as amended by RA 10623, which imposes a “price freeze” on these basic energy products being sold in the areas affected by the calamity.
In addition to this clarification, the DOE monitors oil trading in the international market and analyzes its effects on the domestic prices of petroleum products as mandated by the Oil Deregulation Law of 1998.
Starting mid-January, Filipinos are expected to feel the impact of higher fuel excise tax rates at gasoline pumps.
For now, the DOE said in a statement that the additional excise tax on fuel under the newly-enacted TRAIN law should not affect the costs of oil companies’ old or existing stocks, including those under the 15-day minimum inventory requirement.
Energy Secretary Alfonso Cusi assured the public that his department is keeping a close watch over oil firms to prevent possible profiteering over the implementation of TRAIN, which took effect last Monday, January 1.
“As directed by President [Rodrigo] Duterte, the government taxes should not profit the companies, because these are all intended for the services of the government to the public and the public alone,” Cusi said in a statement.
He added that the oil firms “willingly agreed” to submit their stock inventories under a notarized document to be submitted to the energy department.
The energy chief said the oil companies also agreed to require their retailers to post what products would be charged with excise tax and when it would be implemented.
According to Phoenix Petroleum vice president for external affairs Raymond Zorrilla, his firm will “maintain” prices for “at least 15 days.”
PTT Philippines general manager Danilo Alabado, meanwhile, said his company is still “in the process of accounting” oil inventory and projections to determine until when existing stocks will last.
As for Pilipinas Shell, company spokesperson Cesar Abaricia said they have yet to receive advisories from retailers on current inventory levels.
“If you are asking about the stocks in the retail stations, we are still checking it from our retail group,” the Shell official added.
Cusi said the DOE would conduct a random audit and monitoring activities in compliance with TRAIN, both in the depot or refinery level and in the retail level or gasoline stations.
Energy Undersecretary Felix Fuentebella said the following rate hikes are seen once old stocks are consumed:
- gasoline to increase by P2.97 per liter to P50.12, from about P47.15
- diesel to go up by P2.80 per liter to P39.30, from about P36.50
- kerosene to surge by P3.30 per liter to P45.80, from about P42.50
- liquefied petroleum gas (LPG) to rise by P12 per 11-kilogram cylinder to P562, from the average P550
Adjustments in prices of petroleum products are implemented every Tuesday.
For value added tax, the new rates under TRAIN that are applicable to consumers started last Monday.
For kerosene and household LPG, the DOE reiterated that a price freeze should be observed in calamity-hit areas.
The DOE further advices that adjustments on petroleum products are implemented every Tuesday of the week, based on the results of Friday trading activities that are accessed on the following Monday.
The DOE calls on the public to be vigilant and to report any violation to the DOE’s Consumer Welfare and Promotion Office at tel. no. 479-2900 loc. 329.