CRUSHED HOPES

Im­ple­men­ta­tion of sec­ond fuel ex­cise tax in Jan­uary crushes hopes of a con­tin­ued down­ward trend in oil prices

Cebu Daily News - - FRONT PAGE - by Jessa Mae O. Sotto, Jose Santino Bu­na­chita, Delta Dyrecka Leti­gio and INQUIRER.net

The se­ries of roll­backs in fuel prices in the last quar­ter of this year is ap­par­ently too good to last. A wave of oil price hikes is ex­pected next year as Bud­get Sec­re­tary Ben­jamin Dio­kno an­nounced the ap­proval by Pres­i­dent Ro­drigo Duterte of the next tranche of fuel ex­cise tax and is ex­pected to start in Jan­uary 2019 de­spite an ear­lier an­nounce­ment that its im­ple­men­ta­tion would held in abeyance for the first quar­ter of 2019.

Since Oc­to­ber, fuel prices have de­creased al­most ev­ery week, com­ing up to P10.55 for diesel and P11.85 for gaso­line.

The ap­proval of the im­ple­men­ta­tion of the sec­ond tranche of the ex­cise taxes on fuel prompt- ed trans­port groups in Cebu to brace for its im­pact while busi­ness lead­ers are mulling bet­ter mech­a­nisms for a quicker sus­pen­sion of the ad­di­tional ex­cise tax on fuel prod­ucts.

Fare hikes

Bus and minibus op­er­a­tors in Cebu prov­ince are hop­ing that the Land Trans­porta­tion Fran­chis­ing and Reg­u­la­tory Board in Cen­tral Visayas (LTFRB-7) will ap­prove their pe­ti­tion for in­crease in the min­i­mum bus fare.

Julie Flo­res, chair­per­son of the Cebu Provin­cial Bus and Minibus Op­er­a­tors Trans­port Co­op­er­a­tive (CPBMBOC), said they have al­ready lodged a pe­ti­tion to in­crease bus fares from the min­i­mum P6 to P10, and P1.50 from P1.20 for each suc­ceed­ing kilo­me­ter, last Novem­ber.

“Apek­tado gyud tanan sec­tors ani. Labi na kami mga op­er­a­tors, own­ers sa bus ug minibus (All sec­tors are def­i­nitely af­fected by this. Es­pe­cially us op­er­a­tors, own­ers of bus and mini-buses),” Flo­res added.

This could trans­late to a bus fare of P62 from P48 for a pas­sen­ger rid­ing at the Cebu South Bus Ter­mi­nal (CSBT) to Car­car City, which is around 40 kilo­me­ters south­east of Cebu City.

“Our pe­ti­tion is now up to LTFRB to de­cide,” Flo­res said.

TRAIN

Un­der the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN) Act, an ad­di­tional levy of P2.24 per liter will be im­posed on diesel and gaso­line start­ing Jan­uary 1. The ad­di­tional duty con­sists of P2 ex­cise tax and 24 cen­tavos value-added tax (VAT).

Dio­kno said this move was based on pre­dic­tions that world crude prices would fur­ther go down in 2019.

Dio­kno ex­plained that “he (Duterte) is sim­ply im­ple­ment­ing the TRAIN law. Even with the sec­ond tranche, oil prod­uct prices will be P10 lower than their peak some­time in Oc­to­ber.”

He said the ar­gu­ments that led to the ap­proval were “the sharp turn­around in world crude prices. From a peak of close to $80 (per bar­rel) to $68pb in Novem­ber 29, with Dubai Fu­tures prices pro­ject­ing fur­ther de­cline be­low $60 per bar­rel in 2019.”

“At its peak, diesel price was P49.80 per liter. It will be P37.76 in Jan­uary ‘19, in­clu­sive of the P2 ex­cise tax,” Dio­kno said.

“For gaso­line (95 Oc­tane) it was P60.90 at its peak, it will be P50.82 in Jan­uary in­clu­sive of P2 ad­di­tional ex­cise tax. Sec­ond, the con­di­tion for sus­pen­sion does not ex­ist. Third, huge rev­enue loss es­ti­mated at P43.4 bil­lion,” he added.

Could be wrong

But for­mer House Deputy Speaker Erin Tañada said the coun­try’s eco­nomic man­agers may be wrong again in their pre­dic­tion of oil prices for 2019.

“Kung sinasabi po nila na ang pro­jec­tion ay hindi tataas ang presyo, eh nagka­mali na sila noon. Pwede silang magka­mali ulit ngayon,” he said dur­ing a press brief­ing in Que­zon City.

(When they said their pro­jec­tion was that the price wouldn’t go up, they were wrong. They can be wrong again now.)

“Sabi nila hindi tataas ang in­fla­tion. Ngayon sin­isingil sila sa sin­abi nila na hindi pag­taas ng in­fla­tion. Ano’ng sinasabi nila? Wow, mali. Pwe­deng ma-wow mali na na­man sila rito,” he added.

(They said in­fla­tion wouldn’t rise. Now they’re be­ing called to task for say­ing that in­fla­tion won’t rise. What are they say­ing? Wow, it’s wrong. They could be wrong again this time.)

High prices

De­spite the re­cent strings of oil price roll­backs, Tañada said that this was not enough rea­son to con­tinue with the im­ple­men­ta­tion of ex­cise taxes.

“Unang-una, hindi pa na­man bum­ababa ang presyo ng bil­i­hin,” he said.

“Ang im­por­tante dito, hin­tayin mo muna bum­aba ‘yong presyo ng mga bil­i­hin natin para hindi mahi­ra­pan ang at­ing mga ma­ma­mayan.”

(First of all, the prices of goods have not gone down. What’s im­por­tant here is to wait for the prices of goods to go down so that our coun­try­men won’t suf­fer.)

“Ayokong gamitin na por­ket bum­aba lang ang presyo ng langis ay pwede nang itaas ulit ang ex­cise taxes,” he added. “Im­por­tante ang mga pro­jec­tion na gi­na­gawa nila eh pag-ar­alan nang mas mabuti at mas ma­haba dahil alam na­man po natin ang prob­lema no’ng 2018.”

(I don’t want to use the jus­ti­fi­ca­tion that just be­cause the price of oil has gone down then we can again raise ex­cise taxes. It’s im­por­tant for them to study the pro­jec­tions they’re mak­ing more closely and longer, be­cause we all know what prob­lem we had in 2018.)

Sus­pen­sion

Cebu Cham­ber of Com­merce and In­dus­try (CCCI) Pres­i­dent An­to­nio Chiu pointed out that oil is a prod­uct whose price can eas­ily in­crease or re­duce based on world mar­ket prices. Hence, the need for bet­ter means to sus­pend the ad­di­tional ex­cise tax on fuel prod­ucts.

“They should shorten the ob­ser­va­tion pe­riod. They have to have le­gal ba­sis to say that for this week or this month, we should sus­pend col­lect­ing ex­cise tax. I just hope it is shorter,” he said.

Cur­rently, un­der the TRAIN law, the ex­cise tax on fuel can only be sus­pended when the global price of oil av­er­ages $80 dol­lars per bar­rel or higher within three con­sec­u­tive months.

Ac­cord­ing to Dio­kno, the cur­rent oil price has gone down to 53 to 52 dol­lars per bar­rel hence the le­gal re­quire­ment for the sus­pen­sion of ex­cise tax on fuel can­not be met.

Chiu said this pe­riod should be shorter so that when global price of oil in­creases all of a sud­den, the govern­ment can im­me­di­ately sus­pend the ex­cise tax to help con­sumers cope.

He said this can be done by an amend­ment signed by the Fi­nance Sec­re­tary.

Cebu Busi­ness Club Pres­i­dent Gor­don Alan Joseph agreed with the need to put in place a quick mech­a­nism.

“Or pro­vi­sions should be made to cap the in­crease or to re­duce the tax if oil prices in­crease,” Joseph sug­gested.

He added that while global oil prices may be at a down­trend now, this does not mean that it will not in­crease again in the com­ing months.

Protest

The Pi­nagkaisang Sama­han ng mga Tsu­per at Op­er­a­tors Na­tion­wide (Pis­ton) Cebu Chap­ter held a protest yes­ter­day at Colon Street con­demn­ing the sec­ond round of fuel ex­cise tax hike.

Greg Perez, Pis­ton-Cebu co­or­di­na­tor, said it will crip­ple the or­di­nary jeep­ney driv­ers, and may even force some trans­port groups to seek a fare hike, sim­i­lar to that of CPBMBOC.

Not only are they calling for the sus­pen­sion of the ex­cise tax, but also the abo­li­tion of the TRAIN law.

“Nya mo­taas ang gasolina, basin mo­taas ang plite. Ang luoy ra gyud an­ing TRAIN law kay ang or­di­nary­ong tawo (The gaso­line price will rise, the fare will rise. The poor peo­ple are the ones suf­fer­ing with the TRAIN law),” said Perez.

/INQUIRER PHOTO

Gaso­line sta­tions, like this one in Manila, started to ride on the TRAIN law by an­nounc­ing in­creases in pump prices as a re­sult of the new tax law.

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