Thursday, January 4, 2018

Department of Energy to Oil Companies: We're Watching You


After oil companies geared up to implement the new excise tax on fuel last January 1, 2018, the Department of Energy (DOE) countered and said: not so fast.

After meeting with the oil companies yesterday, Energy Secretary Alfonso G. Cusi said that the DOE is keeping a close watch over oil firms to prevent possible profiteering over the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) or Republic Act 10963.

Cusi stressed that the additional excise tax on fuel under TRAIN should not affect the prices of old stocks of oil firms, including their stocks under the 15-day Minimum Inventory Requirement.

“As directed by President Duterte, the government taxes should not profit the companies, because these are all intended for the services of the government to the public and the public alone.”

This means that the earliest implementation date for the revised excise tax on fuel is on January 15, 2018. However, the situation is more complicated than that.

Cusi said that to the credit of the oil companies, they willingly agreed to submit their stock inventories as of the cut-off date (31 December 2017) under a notarized document to be submitted to the DOE.

The oil companies also concurred to share their data regarding their sales to the dealers/retailers to determine which stocks will be applied with the Excise Tax.

For further transparency, the oil companies will also require their retailers to post what the products will be charged with Excise Tax and when it will be implemented.

In short, the implementation of the new excise tax on fuel is very fluid and will vary from brand-to-brand (depending on their stock). If implemented, the revised excise tax on fuel will result in the following increase in pump prices (VAT inclusive):
  • Gasoline: P 2.97 / liter
  • Diesel: P 2.80 / liter
  • LPG: P 1.12 / kilogram
This increase will only be the first in a series of 3 increases that will stretch until 2020.

Cusi said the DOE and other relevant government agencies would conduct random audit and monitoring activities on the compliance with TRAIN, both in the depot/refinery and the retail level or gasoline stations.

3 comments:

  1. So what if these big three break the rules? What's this government going to do about it? Nothing! As helpless as kittens these schmucks are! A case in point is Shell's technical smuggling of billions of pesos. We never heard from it again.

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  2. On Jan 6, 2018, a gasoline station here in our place had their 91 Octane Gas priced more expensive than their 95 Octane Gas. They said that they had earlier ran out of 91 Octane Gas, and the new fuel was recently delivered, thus the new higher price. So the Jan 15 date is untrue.

    ReplyDelete
    Replies
    1. Implementation is on a brand to brand and even station to station basis. The January 15 date is based on the DOE’s mandate that oil companies must stock good enough for 2 weeks. But stocks vary per brand. Let’s just say it would be a good idea to gas up regularly starting now.

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