A House leader has renewed his call for the automatic suspension of excise taxes on fuel amid the successive pump price hikes last month.
By way of House Bill (HB) No. 5176, Camarines Sur 2nd district Rep. LRay Villafuerte wants to make permanent the temporary provision in Republic Act (RA) No.10963 that stopped the previous administration from collecting the excise tax on fuel products whenever the average per-barrel cost of Dubai crude oil, based on the Means of Platts Singapore (MOPS) rate, reached $80 over a three-month period prior to the planned suspension of the tax collection.
RA No.10963 is also known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law. The law’s provisional authority to suspend the fuel excise tax whenever the $80-price cap is breached ended in 2020.
Last Tuesday, Jan. 31, the retail cost of gasoline and diesel went up by P1.30 and P1.00 per liter, respectively. It was the third successive upward adjustment in pump prices for January.
The Villafuerte bill seeks to amend Section 148 of the National Internal Revenue Code to provide for “the automatic suspension of the excise tax on regular gasoline, unleaded premium gasoline and diesel fuel oil whenever the Dubai crude oil price based on MOPS averages $80 or more per barrel over the three months before the proposed suspension of the tax collection".
According to the Commission on Appointments (CA) majority leader, bringing down the cost of fuel will "provide instant relief to the Filipino people" and "shield them from further adversities that may be caused by unforeseen economic downturns".
It was last year when HB No.5176 was referred to the House Ways and Means Committee.
“Geopolitical conflicts and other developments in world markets have been driving up the cost of petroleum products, which, in turn, have jacked up transportation expenses and food prices responsible for the seemingly unending elevated inflation that now threatens to slow the global economy and possibly even lead to recession in most parts of the world,” Villafuerte said.
According to the Philippine Statistics Authority (PSA), inflation soared to a 14-year record of 8.1 percent last December, the highest since the 9.1 percent clip in 2008—the year of the global financial crisis—and the ninth consecutive month in 2022 that the pace of commodity price hikes breached the target range of 2 percent to 4 percent set by the Bangko Sentral ng Pilipinas (BSP).
PSA data showed the continued inflation spike last month resulted from the higher price index for electricity, vegetables, restaurant services, and private and public transport.
From an average per-barrel cost of about $80 at the onset of 2022, the global benchmark Brent rate went up to as high as $139.13 at one point last year, and raised speculations that local fuel prices could hit P100 a liter.
Last year’s peak in pump prices were at P81.02 per liter for gasoline, P83.73 for diesel and P84.78 for kerosene.