Pump prices rolling back

Published February 2, 2019, 12:00 AM

by manilabulletin_admin

By Myrna Velasco

After a series of price hikes in January, the cost of petroleum prod­ucts at the pumps will be taking a reverse course this week as gasoline prices will be cut by P0.65 per liter, and diesel by P0.35 per liter.

Independent player Phoenix Petroleum Philippines Inc. was the first to roll back fuel prices effective 6 a.m. Saturday.

FLUCTUATING FUEL PRICES - After rising for the past weeks, prices of diesel and gasoline will be rolled back in the coming week. (ALVIN KASIBAN / MANILA BULLETIN)
FLUCTUATING FUEL PRICES – After rising for the past weeks, prices of diesel and gasoline will be rolled back in the coming week. (ALVIN KASIBAN / MANILA BULLETIN)

The Dennis Uy-led firm’s lead is anticipated to be followed by other industry players – with price reduc­tion notices anticipated this weekend until Tuesday, February 5, which co­incides with the Chinese New Year.

Filipino consumers were practi­cally squeezed on their fuel budgets last January with roughly a month of price increases having to shoulder additional costs courtesy of the sec­ond tranche excise tax adjustments under the Tax Reform for Accelera­tion and Inclusion (TRAIN) Act of the Duterte administration.

The price rollbacks this week will partly be a financial respite to consumers, although they need to shell out additional cash for liquefied petroleum gas (LPG) products.

As of Saturday, Eastern Petroleum Corporation increased its EC Gas LPG brand by P3.40 per kilogram or P37.40 for the 11-kilogram standard cylinder.

Written explanation

Meanwhile, on the TRAIN excise tax adjustments, the Department of Energy (DOE) following the issuance of show-cause orders on some oil companies, is being nudged to show that it can get tough against industry players who breached rules on the enforcement of the TRAIN Law.

However, when asked if the DOE would summon the oil firms which imple­mented early tax adjustments, Energy Secretary Alfonso G. Cusi said there might be no need to go to that extent.

“I don’t like to pre-empt things be­cause we might be able to clarify (these concerns) later on… so as not to cause unnecessary stress on anybody’s part, we just want to be very objective,” the energy chief said.

The DOE just required the oil com­panies apprehended on early tax adjust­ments to submit a written explanation and report on why increased taxes ahead of the schedule anticipated by the department.

The government was latching on to the 15 to 30 days of product inventory of the oil companies, and expected the implementation of higher taxes by at least mid-January. However, hundreds of gasoline stations increased the tax as early as January 2.

Local refiners, in particular, noted that there are daily withdrawals from refineries being delivered to depots and gasoline stations – and those products were already imposed with higher ex­cise taxes; hence, the warranted pass-on also as products move from refinery to the distribution networks.

Other oil firms similarly noted that in some of their stations, there could just be one gas pump that ran out of diesel inventory that has to be replaced with new products and such would already be levied with higher excise tax.

“There were also cases of double to triple reporting – and that could hap­pen in just one gasoline station. For example, if old diesel inventory runs out today, we will have to report that to the DOE because new products with higher taxes will already be sold. Then if gasoline inventory is used up, we need to report that again – so there were a lot of cases like that,” an industry player has explained.

It is the wish of the oil companies then that the government come up with a more systematic approach so the enforcement of the next tranche of the excise taxes won’t be as convoluted as the first two.

The DOE is expecting full imple­mentation of the second batch of higher petroleum excise taxes by the end of this week noting that some oil companies have heftier inventories.