300 gas stations must explain early charging of higher excise taxes
ONLY 3.47 percent of the 8,630 gasoline stations nationwide have started implementing higher fuel prices brought about by higher excise taxes under the second tranche of the Tax reform for Acceleration and Inclusion (TRAIN) law.
The second-round additional excise tax of P2 is imposed per liter of diesel and gasoline, and P1 per kilogram on household LPG. There will also be an additional 12-percent value-added tax, for a total of P2.24 for both diesel and gasoline, and P1.12 for LPG.
Based on data submitted by the oil firms to the Department of Energy (DOE), only 300 service stations were monitored to have started implementing the second tranche of the TRAIN law for petroleum products.
Of the 300, the agency said 268 are Petron stations and the 32 are from Flying V.
“The Petron figures were as of January 5. The report we received regarding Flying V is as of Monday morning,” said Energy Undersecretary Felix William Fuentebella.
Petron is the largest oil refiner in the country and is the leading oil firm. It has 2,400 stations nationwide.
The DOE will issue show-cause orders to all 300 stations to compel them to explain why they have implemented fuel-price hikes as early as January 2, 2019.
Fuentebella explained that although Petron’s inventory is good for 30 days, the oil firms have been citing reasons for implementing higher prices ahead of others. The energy department earlier warned oil companies against imposing the new rates even on old inventory, adding that the firms could be held liable to syndicated estafa.
“The 30-day inventory is applied to crude oil. The crude oil needs to be refined, which will result in a finished product. Thereafter, this will be sent to various service stations before the finished product is sold to consumers.
“At the gas station levels, there are two factors considered. The storage capacity and the turnover of old to new stock. The smaller the storage tanks are, the faster the supply runs out. It also depends on how fast the supply runs out, probably due to higher demand,” explained Fuentebella.
He added that the DOE is expecting bulk of the 8,600 stations to implement the higher excise taxes between January 15 and February 1 this year.
Energy Secretary Alfonso G. Cusi said the agency will be more vigilant in monitoring the implementation of the second tranche of the TRAIN Law for petroleum products.
“We will ensure the fuel stocks for 2018 will be utilized first and sold at the pre-implementation prices,” Cusi said.
However, the DOE pointed out that the increase in pump prices of petroleum products resulting from the imposition of the second tranche of fuel excise tax will still be smaller. This is due to the offsetting effect of the rollbacks implemented in 2018 and January 2019.
Price hike
MEANWHILE, oil firms on Monday announced a price increase in gasoline by P0.80 per liter, diesel by P0.70 per liter and kerosene by P0.40 per liter effective 6 a.m. of Tuesday. This is the first oil price hike for the year.
“Saudi Arabia and Opec [Organization of Petroleum Exporting Countries] were talking last week
about production cuts. The market reacted,” explained Fuentebella.
While there is an uptick in the price of oil in the world market, Cusi pointed out that industry forecasts do not see crude oil prices hitting record-high prices, such as in October 2018, when Brent crude oil price breached the $80-perbarrel level.
“If the trend continues, we do not expect it to have as much impact on fuel prices as it did last year. Besides, we can cushion the effect of any new oil price increases by becoming more efficient in our use of energy,” he said.
On Sunday, the Senate’s energy committee chairman, Sen. Sherwin Gatchalian, had said the clamor in some sectors to suspend the second-round excise taxes on oil products under TRAIN is no longer a viable option, even as a hedge against any fresh uptick in inflation. Instead, Gatchalian said the TRAIN can be amended to scuttle the requirement that authorities wait for world oil prices to hit $80 a barrel for three consecutive months before suspending the TRAIN. Discarding this requirement will give officials more elbow room in dealing with contingencies arising from another spike in inflation similar to what took place for most of 2018, Gatchalian said.