Today’s piece is a reflection on the fuel marking program (FMP), a topic that is the current buzz in business circles and one close to my heart as a chemist by education and a nosy journalist by profession.

That’s right, Virginia, I’m joining the fray. I will try to go deep into the government’s fuel-marking program, especially since the five-year contract with the consortium of SGS Philippines and Switzerland-based SICPA SA expired just this past Tuesday.

Following its expiration, the latest discussion circulating in the business community is a suggestion from consumer protection groups for concerned authorities to conduct a comprehensive study of the FMP before bidding out a renewal contract. This is anchored in the context of the program’s core objectives: curbing fuel smuggling, ensuring product integrity, and preventing tax evasion. However, it also weighs the environmental and health impacts, as well as the incremental operational costs to oil players—which, naturally, are passed on to us, the consumers.

That’s right, Virginia. The FMP has a cost that is first absorbed by the oil firms and later passed on to consumers. A market player shared that fuel marking, based on the latest data, costs roughly ₱0.0615 per liter.

Just imagine the millions, if not billions, of liters of petroleum products the domestic economy consumes. The country’s gasoline consumption, based on the latest figures from 2023, stands at 123.09 thousand barrels per day—up by 6.82 thousand barrels from 116.27 thousand barrels per day in 2022.

Rather than seeing it as a mere driver of pump costs, I agree that under prevailing volatile oil prices, the FMP is a vital defense mechanism. Among other things, it ensures that consumers are not paying premium prices for adulterated or smuggled fuel.

Yes, Virginia, the FMP is an essential tool that marries the objective of curbing malpractices with pumping additional revenues into the national coffers. Those benefits are real and must be underscored.

However, the soundness of the FMP is apparently under the microscope following reports from Kenya regarding the alleged use of “harmful chemical fuel markers.” Before we dive deeper into the issue, let’s be clear: the FMP entails applying chemical tracers to petrol, diesel, and kerosene products that enter the country.

Reflecting on the FMP, a former steward of an oil firm believes it is a good move for concerned authorities to conduct a thorough review before the program is extended or bidded out to proponents.

The review suggestion is “highly practical,” the source opined. It should take into consideration the contextual health risks to motorists and commuters, the impact on the atmosphere (particularly on air quality), and, more importantly, the expanded value-added tax (EVAT) environment.

Prior to EVAT implementation, petroleum products, electricity, and services were tax-exempt.

Sometime back, a player in the oil industry conducted a “six-month pilot study” on the effectiveness of the FMP. The conclusion? It’s difficult to apprehend and then prosecute offenders, as a whole gamut of representatives from the police, the Bureau of Internal Revenue, the Bureau of Customs, and the Department of Energy must be assembled just to effect an apprehension.

Meanwhile, a seller's—or in this case, an oil firm’s—issuance of a BIR-registered receipt for every transaction already provides a good paper trail. It may not be absolute proof, but all things considered, it confirms that the oil company is legally charging the customer the output VAT.

As a chemist, I fully support the proposal for the government to commission independent testing by reputable laboratories and scientific institutions to examine the marker's chemical composition and combustion emissions.

The review is timely and goes beyond fuel smuggling. It touches on public health, environmental protection, and even the performance of the vehicles we bought with our hard-earned money.