Oil firms urged not to pass on higher tax to consumers

Oil companies have been urged not to pass on to consumers the full cost of the excise taxes on fuel imposed under the tax reform package signed by President Rodrigo Duterte in December.

1-PACMAN Party-list Rep. Michael Romero, an economist, said that oil firms should consider other options as Filipino consumers are price-sensitive.

“We have seen in previous big-time price hikes that the oil firms staggered their price adjustment,” Romero said.

“They might, as they have in the past, spread out the seven pesos in installments. Maybe the staggering could be a P1.50-hike per week. There are other combinations they can do,” Romero added.

The Tax Reform for Acceleration and Inclusion (Train) law imposes a P7 excise tax on gasoline.

Romero said if the firms believe that P7 is too much to pass on fully to consumers, they can instead pass it on within the range of 50 percent to 90 percent of the full P7 excise tax per liter.

With the implementation of higher tax rate on fuel, Romero believes that there will be public transport ridership spikes as many will not use their vehicles.

“The TNCs and TNVS will see their ridership spike because private vehicle owners’ gasoline-powered cars will spend more time parked at home,” Romero said.

He said that the Metro Manila Development Authority and the Department of Transportation should now seize this opportunity of a real shift in consumer choices.

“More point-to-point buses should ply the major roads to ferry office workers and students,” he said.

“For jeepney drivers, the government can revive the Pantawid Pasada Program to subsidize PUJ purchases of diesel which now has an excise tax of P2.50 per liter,” Romero added.

Meanwhile, Senator Juan Edgardo Sonny Angara called on the government to use the pro- ceeds from the tax reform law on programs to fix the Metro Rail Transit (MRT) Line 3, which down more than 500 times in the past year.

Under Republic Act 10963, or the Train law, 70 percent of the yearly incremental revenues generated will be allocated to the Build, Build, Build Program and other infrastructure programs that seek to address congestion through better mass transport and new road networks.

The Department of Transportation has blamed the problem on the lack of spare parts. MRT serves about 463,000 people daily.