DOE reminder: No excise tax on old fuel stocks

MANILA - The Department of Energy (DOE) has reminded oil companies that higher excise taxes levied under the Tax Reform for Acceleration and Inclusion (TRAIN) Law do not apply to old stocks of fuel products.

Speaking to Palace reporters, Energy Secretary William Fuentebella warned that any company proven to be profiteering amid the implementation of tax reform law and the soaring oil prices might be slapped with a largescale estafa case.

“Old stocks of (fuel products) must not be covered by the new excise tax rates,” he said in a press conference Thursday, May 31.

“If we discover that they are making unfair and excessive profit -- we already told oil companies -- we will not think twice about filing large-scale estafa against them. That’s clear. That would be aside from administrative penalties that could be imposed on them,” he added.

The Energy official’s remark came amid clamor to suspend the provision that raises the fuel excise tax, as the prices of oil in the world market rapidly increase.

Prices of liquefied petroleum gas (LPG), diesel, gasolene, and kerosene went up by P1, P2.50, P7 and P3, respectively, following the implementation of TRAIN Act in January this year.

By 2019, the prices of LPG, diesel, gasoline, and kerosene are expected to increase by P2, P4.50, P9, and P4, respectively.

Fuentebella noted that no oil firms have so far been reported of imposing new excise tax rates on old oil supplies.

“We have monitored them and so far, they are complying,” he said. “The good thing is they are cooperating, and they should cooperate because at the end of the day, if the consumers lose their trust in them, they will also lose profit.”

Earlier this month, the benchmark Brent crude climbed to $80 per barrel, the highest level since November 2014.

Fuentebella said Energy Secretary Alfonso Cusi has directed state-owned Philippine National oil company Exploration Corporation (PNOC-EC) to prepare for oil trading in a bid to boost competition among existing oil industry players and pacify domestic oil prices.

“The Secretary has already directed PNOC Exploration to go to that direction. The PNOC has already secured some of the storage facilities that will be utilized for the stockpiling. What is the importance of stockpiling? In any event, we have to secure supplies so we have that third level of security,” he said.