Big oil price hike likely this week

Published May 9, 2020, 12:00 AM

by manilabulletin_admin

By Myrna Velasco

Oil prices in the country will likely increase next week with the costs of gasoline products inching up by P1.90 to P2.10 per liter; and diesel could be higher by P1.70 to P1.90 per liter, according to estimates by industry players.

For kerosene, a leaner P1.00 to P1.20 per liter increase is expected, based on the calculations of the oil companies that observed price swings in the world market.

Industry players qualified that the estimated price hikes do not include the cost-impact yet of the newly enforced higher duty of 10-percent on imported crude and finished petroleum products.

For the increased duty, the estimate is that this will likely inflate prices at the pumps by an additional P1.00 per liter; and this may already kick off next week.

International prices recovered last week after hitting all-time lows in the previous weeks; and that was a development most awaited by the massively beaten oil and gas sector globally.

As of end-Thursday trading in the world market, Dubai crude, which is the benchmark for Asian markets, hovered at US$27 per barrel; while international pricing reference Brent crude relatively surged to the level of US$30 per barrel.

Corresponding to the mandate of Executive Order No. 113 that was issued by President Rodrigo Duterte last week, the Bureau of Customs (BoC) has issued a memorandum circular on how the higher duty shall be levied on oil product imports.

The Customs bureau stipulated that crude and refined petroleum products, “regardless of the country origin, which are entered and withdrawn from warehouses in the Philippines for consumption, shall be subject to a temporary additional import duty of 10%, on top of their existing most favored nation and preferential import duties.”

The BoC also emphasized that “for petroleum products covered under the fuel marking program of the Bureau, all district and port collectors must ensure that the additional 10% import duties as provided by EO 113 are assessed, levied and paid prior to fuel marking.”

As aligned with Section 105 of the Customs Modernization and Tariff Act (CMTA), the BoC further stated that “imported goods shall be subject to the import duty rates under the applicable tariff heading that are effective at the date of importation or upon withdrawal from the warehouse for consumption.”

The policy under the EO, as decreed, “shall remain effective until such time that Republic Act 11469 or the “Bayanihan to Heal As One Act’ ceases to take effect, or upon the reversion of the modified rates of import duty to 0% as international oil prices increase, whichever is earlier.” (MMV)