Shell vows not to raise prices until old stocks are depleted

Pilipinas Shell Petroleum Corp. has vowed to comply with the Department of Energy (DOE) directive to raise pump prices related to the Tax Reform for Acceleration and Inclusion (TRAIN) only after old stocks are fully exhausted.

“We will comply with DOE’s directives to oil companies that the implementation of the excise tax under TRAIN shall not be applied unless Dec. 31, 2017 inventory of finished products are fully exhausted,” Shell communications and social performance manager Cesar Abaricia said.

“Hence, our retail stations will apply the new excise taxes on fuels only when their old inventories are fully consumed,” he said.

Last week, the DOE said the new excise tax on petroleum products should be applied starting Jan. 1, but should not cover old stocks.

The agency said it expects the increase in fuel prices 15 days after the start of the year. Therefore, no fuel price increases related to the new tax regime should be implemented before Jan. 16.

Under the signed TRAIN Act, gasoline would be slapped a higher excise tax from P4.35 per liter to P7 per liter, while new tax rates of P2.50 per liter would be imposed on diesel, P3 per liter on kerosene and P2.50 per liter on auto liquefied petroleum gas (LPG).

Based on DOE estimates, gasoline prices are expected to have an additional P2.97 per liter, diesel with P2.80 per liter, kerosene with P3.36 per liter, LPG for motor vehicles with P2.80 per liter, and LPG for household with P1.12 per kilogram.

To ensure transparency and avoid profiteering, the DOE has directed oil companies to submit their inventories to be able to monitor how much stock is left in their books.

The oil companies also required their retailers to post what the products would be charged with excise tax.

Moreover, the DOE and other relevant government agencies would conduct random audit and monitoring activities on the compliance with TRAIN, both in the depot/ refinery and the retail level or gasoline stations.