Malacañang on Tuesday assured the public that measures will be in place to protect consumers from the incessant increase in oil prices, including the suspension of the excise tax on fuel once the trigger level of $80 per barrel becomes consistent for three months.
“Excise taxes will be suspended if they [oil prices] reach a certain amount, if I’m not mistaken, $80,” Presidential Spokesman Harry Roque said in a Palace briefing, referring to a provision under the Tax Reform for Acceleration and Inclusion Act.
Roque made this statement after the local oil industry announced on Monday that it has raised gasoline prices by P1.60 per liter, diesel by P1.15 per liter and kerosene by P1 per liter—the second week in a row when pump prices went up by more than P1 per liter.
Data from the Senate committee on energy showed that from January to May, gasoline prices already increased by P8.07/liter while diesel went up P8.95/liter.
Noting that Filipinos are already bearing the brunt of the price increases, Senate energy committee chairman Senator Sherwin Gatchalian warned that the administration must plan ahead “in the event that crude prices reach the $100-per-barrel threshold in the global market.”
World oil prices soared due to tight supply levels amid strong demand and geopolitical concerns, including a worsening crisis in Venezuela and worries about the US nuclear deal with Iran and sanctions on Tehran.
Energy Secretary Alfonso Cusi said the incessant increases are “being monitored closely” by the Department of Energy as this will impact on consumers’ spending power and will be “financially punishing” for all Filipinos.
On Monday, Socioeconomic Planning Secretary Ernesto Pernia called for the faster processing of financial assistance to the public amid the “abrupt” and rapid rise in oil prices.
“Unconditional cash transfers have to be more speedily disbursed to the 10 million poorest households and also the Pantawid Pasada,” he said.
Under the said program, the government will provide beneficiaries unconditional transfers worth P200 a month or P2,400 a year. The amount will be increased to P300 a month of P3,600 a year in 2019 and 2020.
The government will also provide jeepney drivers cash cards worth P2,200 a month under the Pantawid Pasada Program which aims to cushion the impact of higher excise taxes on oil products.
With the TRAIN Act in effect, prices of liquefied petroleum gas increased by P1 per liter, diesel by P2.50 per liter, and gasoline by P2.65 per liter as a result of higher excise taxes.
In the House of Representatives, Finance Secretary Carlos Dominguez III said the TRAIN was being “unfairly blamed” for the rise in consumer prices, saying it accounted for less than half a percentage point of the inflation rate in April.
This, he told the House committee on ways and means, meant that for every peso increase in prices, only 9 centavos can be attributed to the government’s tax program.
He said the sharp rise in prices can be attributed to higher oil prices as well as changes in currency exchange rates.
For his part, House Speaker Pantaleon Alvarez said Package 2 of TRAIN—which would lower corporate income tax from 30 percent to 25 percent—might not be approved by the House before it goes on a break next week.