Fuel tax sus­pen­sion in 2019 stands de­spite lower crude prices – DOF

Watchmen Daily Journal - - Business -

Pres­i­dent Ro­drigo Duterte’s eco­nomic team is stick­ing to its rec­om­men­da­tion to sus­pend the sec­ond tranche of ex­cise taxes on oil prod­ucts next year de­spite the re­cent de­cline of global crude prices, an of­fi­cial of the Depart­ment of Fi­nance (DOF) said yes­ter­day.

“T h a t rec­om­men­da­tion stands and it is an of­fi­cial doc­u­ment that we need to re­ceive from the Of­fice of the Pres­i­dent in or­der to im­ple­ment that rec­om­men­da­tion,” Fi­nance As­sis­tant Sec­re­tary Tony Lam­bino said in a news con­fer­ence in Mala­cañang.

Duterte has yet to come up with a de­ci­sion on the rec­om­men­da­tion even as Bud­get Sec­re­tary Ben­jamin Dio­kno said last week the sus­pen­sion will only be tem­po­rary be­cause of soft­en­ing global oil prices.

Petroleum com­pa­nies have re­cently im­ple­mented price roll­backs due to lower global oil prices.

Based on the mon­i­tor­ing of the Depart­ment of En­ergy for the trad­ing pe­riod Oc­to­ber 29-Novem­ber 2, 2018, Dubai crude has de­creased week-on­week by al­most US$1.70 per bar­rel.

MOPS gaso­line and diesel have also de­creased per bar­rel by around US$2.60 and US$ 2.20, re­spec­tively.

The price roll­backs came weeks af­ter the DOF an­nounced that the sec­ond tranche of ex­cise taxes on oil prod­ucts will be tem­po­rar­ily sus­pended, in ef­forts to an­chor in­fla­tion ex­pec­ta­tions.

Un­der the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN) Law, ex­cise taxes on diesel fuel were hiked by P2.50 per liter this year, while ex­cise taxes on gaso­line were hiked by P7 per liter.

The law also pro­vides that start­ing Jan­uary 2019, ex­cise taxes for diesel will be hiked by P4.50 and those of gaso­line by P9 un­der the sec­ond tranche.

The in­crease, how­ever, could be tem­po­rar­ily sus­pended should the av­er­age price of Dubai crude reach or ex­ceed $80 per bar­rel for three months.

Lam­bino in­sisted that the rec­om­men­da­tion was made be­cause es­ti­mates of crude prices for Novem­ber and De­cem­ber show that the av­er­age price will stay above the $80 thresh­old.

“Ang gi­na­gawa po talaga natin ay tu­mu­tu­long ng konti by mak­ing that rec­om­men­da­tion,” he said.

“But at the same time ina-an­chor po natin ‘yung in­fla­tion ex­pec­ta­tions para ‘yung be­hav­ior ng mar­ket, ‘yung be­hav­ior ng house­holds, ‘yung be­hav­ior ng mga negosyo ay mas mag­ing akma doon sa pag-sta­bi­lize ng mga presyo.”

In­fla­tion re­mained steady at 6.7 per­cent in Oc­to­ber, still a nine-year high since it clocked in at 7.2 per­cent in Fe­bru­ary 2009.

(Ian Paul Cordero photo)

Petroleum com­pa­nies have re­cently im­ple­mented price roll­backs due to lower global oil prices.

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