Gov’t eyeing to raise ₱6.8 B from hiked oil import duty
The Philippine government is eyeing to raise ₱6.783 billion in additional revenues from the increased 10 percent duty to be levied on imported crude and finished petroleum products starting this month.
That has been based on the calculation of the Department of Energy (DOE) as to the scale of collections if the policy will be enforced from May to December this year, according to Energy Undersecretary Felix William Fuentebella.
On the department’s computations, targeted revenues to be fetched from the increased duty shall be: ₱508.612 million for May; ₱718.275 million in June; ₱884.031 million in July; and ₱934.428 million each month from August to December this year.
Fuentebella told reporters in a virtual press briefing that the estimates were reckoned as of May 5, 2020 or just three days after
Executive Order No. 113 was issued by President Rodrigo Duterte, referring to the policy that hiked oil import duties to 10 percent temporarily, so the State could bulk up its cash resources in resisting the adverse socio-economic impact of the coronavirus health plague.
Fuentebella said the cost impact of the increased import duty had been estimated at ₱0.62 per liter for gasoline products; and ₱0.80 per liter for diesel and kerosene products.
He qualified though that the figures may have already changed since May 5, because the gasoline price hike of ₱2.00 per liter; then ₱1.90 per liter increase for diesel and ₱1.25 per liter for kerosene on May 12 had not been factored in yet.
Atty Rino Abad, director of the DOE-Oil Industry Management Bureau (DOE-OIMB) emphasized that given the required level of inventories of the oil companies, the upward price adjustments due to the higher import duties would be implemented by May 21 of this year yet.
He said the energy department has already directed the oil companies to submit report on their inventory levels – then that will be the basis or gauge on when they can pass on the cost-impact of the interim higher import duties.
Within the stretch of the enhanced community quarantines (ECQs) enforced in many parts of the country, Abad noted that demand for petroleum products had been down by 50 percent – and these were very manifest for the months of April and May.
Nevertheless, he qualified that when establishments would gradually return to normal primarily on the easing of the modified ECQ in the country’s main metropolis, it is anticipated that demand would also progressively ramp up to preCovid level.
Fuentebella emphasized the DOE concurred to the proposal of the National Economic and Development Authority (NEDA) on the higher import duty as a stop gap measure for the government’s response to the health crisis because the department had seen the massive reduction in prices since the start of this year.
For gasoline products in particular, he stressed that total decrease in the past months hovered at ₱14.99 per liter; while for diesel, it was already pared by ₱17.53 per liter. There was even heftier price cut for kerosene products at ₱22.82 per liter on aggregate.
With such downtrend in oil prices, the energy officials indicated that there is still massive leverage for the high-taxed oil sector to contribute further to the State coffers.
The 10 percent import duty is added layer to the pile-up of taxes being levied to oil products that are retailed at the pumps, on top of the value added taxes and higher excise taxes under the Tax Reform for Acceleration and Inclusion (TRAIN) Act of the Duterte administration.