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Sunday, May 19, 2024

Government: P6.7 billion via new oil duties

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The government will generate P6.783 billion from Executive Order 113 imposing an additional 10-percent duty on all crude and refined petroleum products, the Energy department said Wednesday.

Malacañang issued the EO on May 2 to boost the government’s income, which is expected to ease the effects of the coronavirus pandemic and launch a rehabilitation program.

The Energy department says the 10-percent tariff will result in a P0.60-per-liter increase in the price of gasoline, P0.84 per liter of diesel and P0.55 per liter of kerosene.

The tariff will also increase the price of LPG by P1.82 per liter, jet fuel by P0.55 per liter and fuel oil by P0.66 per liter.

The government is projected to generate revenues of P508.612 million for May, P718.27 million for June, P884 million for July, and P934.43 million every month from August to December.

Diesel is seen to generate P2.3 billion followed by LPG at P2.22 billion and gasoline at P1.1 billion.

Energy department director Rino Abad said the May revenues were computed based on the sales assumption of March and April.

“We observed that in March, sales of petroleum products went down by 50 percent and our assumption for May is the same for March and April,” Abad said.

He said June volumes were expected to go up by 30 percent, increasing by 60 percent in July and normalizing toward December.

Abad says the recent oil price increase excludes the additional import duty as the department wants the oil firms to first consume their previous inventory before imposing the additional tariff.

“The new products will be taxed. Previously, it took three days for a station’s supply to be depleted, but now it takes six days,” Abad said.

He says the department is looking at a 20- to 30-day window before implementing the additional tariff.

He says oil prices will be trending upward next week as the Organization of Petroleum Exporting Countries and its allies have agreed on production cuts.

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