The Energy Department on Wednesday warned oil companies against profiteering from the imposition of the higher excise tax on petroleum products under the Tax Reform for Acceleration and Inclusion Act.
“As directed by President Duterte, the government taxes should not profit the companies, because these are all intended for the services of the government to the public and the public alone,” Energy Secretary Alfonso Cusi said.
Gasoline prices are expected to go up by P2.97 per liter, kerosene by P3.36 per liter and diesel by P2.80 per liter because of the tax measures. Prices of auto LPG will also increase by P2.80 per liter and liquefied petroleum gas or LPG by P1.12 per kilo.
Cusi said the department was watching oil firms to prevent possible profiteering over the implementation of the new tax measure.
The energy chief said the additional excise tax on fuel under Train should not affect the prices of old stocks of oil firms, including their stocks under the 15-day minimum inventory requirement.
Cusi said oil companies agreed to submit their stock inventories as of Dec. 31, 2017 in a notarized document.
The oil companies also agreed to share their data on sales to the dealers/retailers to determine which stocks should be applied with the excise tax.
The oil companies will also require their retailers to post what the products will be charged
with excise tax and when it will be implemented.
Cusi said the department and other relevant government agencies would conduct random audit and
monitoring activities on the compliance with Train, both in the depot/refinery level and the retail level or gasoline stations.
Energy Undersecretary Felix William Fuentebella said the recent oil price increase this week did
not include the implementation of the higher excise tax.
He said the higher prices would likely be implemented 15 days from Jan. 1 because of the current
level of inventory of the oil firms.
“We are basing this assumption on two things. We have a minimum inventory of 15 days. Based
on DoE data, based on projections we made, the existing old stocks would take at least 15 days until it is exhausted.We are expecting fuel will not increase in next 15 days,” Pulido said.
The officials, however, clarified that price movements based on international trading would still be
reflected weekly.
Pulido said the excise tax implementation could create market distortion but “it’s one of the painful things we have to go through.”
“We’d rather err on the side of consumers and on the law,” he said.