By MYRNA M. VELASCO
The Department of Energy (DOE) has warned oil companies that it will go to the extent of checking their importation notices if they will attempt to enforce higher excise taxes on their old stocks or inventories.
“DOE may have the option to check your importation notices to check compliance,” the agency has stipulated in its notice to the players of the deregulated downstream oil sector.
The energy department similarly directed the oil firms to advise their dealers “that pump prices should only reflect stocks that have actually had the new excise tax rates imposed.”
The DOE further qualified that “old stocks should be sold on the old excise tax rate,” in reference to the last excise tax rates implemented last year.
The anticipated increases in excise taxes for petroleum products – which may kick off by second to third week of this month – is courtesy of the third tranche prescription of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The excise tax increases will be P1.00 per liter for gasoline or P1.12 per liter with the inclusion of value added tax (VAT); P1.50 per liter for diesel (or P1.68 per liter with VAT); and P1.00 per liter for kerosene (or P1.12 per liter with VAT).
This is already the third year that pump prices have been rising at the start of the year because of the tax reform package of the Duterte administration. The first excise taxes hike was in 2018; then the second batch was January last year.
To establish the remaining volume of inventories of the oil companies that shouldn’t be levied with higher excise taxes yet, the DOE has required them last month to submit data on their inventories up to December 31, 2019.
As directed, “concerned oil companies, owners, operators or lessees of storage depots, as well as producers and importers of denatured alcohol for motive power/bioethanol fuel shall submit duly notarized inventories of all petroleum products and denatured alcohol/bioethanol fuel as of midnight of December 31.”
Increases in pump prices in the coming weeks are set with extreme caution as such coincides with the sudden upswing in prices in the world market due to the escalating geopolitical tension between the United States and Iran.
In just the initial trading days of oil in the international market, prices of benchmark Dubai crude for Asian market had already been up by roughly US$2.0 per barrel – reaching a high of more than US$69 per barrel from last week’s leaner average of US$67 per barrel.