Oil companies declare inventories before TRAIN

OIL COMPANIES have begun filing notarized reports declaring their inventories as of end-December 2017 ahead of the implementation of a higher excise tax on petroleum products, the De- partment of Energy (DoE) said over the weekend.

The move was in compliance with the agency’s directive that fuel retailers submit by Jan. 5 an inventory report of their petroleum products to ensure that the new taxes will be applied only on new supply.

As of Friday, oil companies had committed to submit their nota-

rized report, which the DoE wanted to be on a “per depot and per product basis.”

“We will comply with [the DoE’s] directives to oil companies that the implementation of the excise tax under TRAIN (Tax Reform for Acceleration and Inclusion) shall not be applied unless 31 December 2017 inventory of finished products are fully exhausted,” said Cesar C. Abaricia, Pilipinas Shell Petroleum Corp. media relations manager.

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

Undersecretary Felix William B. Fuentebella did not respond to BusinessWorld’s query about oil companies’ compliance rate.

Last week, the DoE said it would be premature for oil companies to be raising prices after it set a minimum 15-day requirement under a department circular.

Mr. Fuentebella said the full impact of the new excise taxes along with the value-added tax on previously untaxed petroleum products should be felt starting in March or April.

Oil companies last Tuesday raised the prices of gasoline, diesel and kerosene by P0.20, P0.65 and P0.75 per liter to reflect the movement of prices in the international market. They have not factored in price increases brought about by TRAIN.

Aside from the inventory report, Energy Secretary Alfonso G. Cusi, through the department’s oil industry management bureau, directed oil companies to submit a daily summary of withdrawal starting on Jan. 1, 2018 until the depletion of the declared end-2017 inventory.

Retailers are also required to post in a conspicuous area, for transparency, notice of the new excise tax implementation under the TRAIN in a signage measuring 1 meter by 1 meter in size.

“We remind the consumers and the oil industry participants that violators face the sanctions under the law,” Mr. Cusi said in a missive dated Jan. 4.