NEW PRICES. This billboard of a gas station reflects the new gas prices following the imposition of excise tax on petroleum products based on the Tax Reform for Acceleration and Inclusion (Train) that took effect on Jan. 1, 2018.
CDN PHOTO/TONEE DESPOJO
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As early as the second week of January, rent-a-car driver Dexter Lalican already observed an increase in the price of petroleum products in the gasoline station along B. Rodriguez St. in Cebu City where he usually fills his vehicle’s gas tank.
The increase, he noted, went as much as P2 per liter.
“I have noticed an increase in the price of gasoline because before, it was only around P46 per liter. Now, the price per liter of gasoline from the gasoline station where I frequently gas up is already at P49,” he said in Cebuano.
Lalican suspected that this is already the effect of the additional excise tax imposed on petroleum products as a result of the Tax Reform for Acceleration and Inclusion (Train) law, which took effect last January 1, 2018.
As it turned out, Lalican’s suspicion was correct, as confirmed by the Department of Energy (DOE) – Visayas Field Office (VFO).
According to DOE – VFO officer-in-charge Saul Gonzales, around 90 percent of gasoline stations in Metro Cebu have already adjusted the price of their products as their new stocks of petroleum products are now subjected to the higher excise taxes.
Gonzales said that based on their monitoring, most gasoline stations are now implementing an increase of their petroleum products ranging from P2 to P3 per liter.
High demand
He, however, explained that aside from the higher excise tax, another reason for the increase in prices is also the increase in oil prices in the world market due to high demand because it is still the middle of the winter season.
“The new stocks of petroleum products were the ones that are subject to excise tax after the implementation of the Train law,” Gonzales said, adding that old stocks from 2017 were still not subject to the higher excise tax.
The data from DOE-VFO’s field personnel are still preliminary estimates, according to Gonzales, as they are still continuing their monitoring on gas stations.
But the DOE is expecting that by the second week of February, all oil companies and gasoline stations will increase their prices due to the higher excise tax, as old stocks of petroleum are seen to be used up by then.
“We are still continuing our monitoring to make sure that no oil companies will take advantage in implementing the Train law,” Gonzales added.
He also reminded gasoline stations to install tarpaulins or signboards visible to the public to inform their consumers that they are now imposing higher excise tax on their products.
Gonzales warned oil companies that they will be sanctioned if they will not follow the order.
“They might face administrative charges for failure to comply in putting up signboards or tarpaulins, informing their consumers on the implementation of excise tax,” he said.
Under the Train law, excise tax on regular unleaded and premium gas will be increased to P7 per liter this year, P9 per liter in 2019, and P10 per liter in 2020; diesel and bunker fuel will be taxed P2.50 per liter this year, P4.50 per liter in 2019, and P6 per liter in 2020; while petroleum gas will increase by P1 every year from 2018 to 2020.
Aside from fuel, the Train law also imposes excise tax on cars, tobacco, coal, cosmetic procedures and sweetened beverages.
The new law, which also removes personal income tax from employees with an annual salary of P250,000 or less, is seen to help fund the Duterte administration’s “Build, Build, Build” program where the government plans to spend P8 trillion to P9 trillion on infrastructure projects between 2017 to 2022.
Noel Añover, head of the Excise Tax Area 3 office of the Bureau of Internal Revenue (BIR) earlier explained to CDN that the increase in excise tax can be implemented immediately even with no implementing rules and regulations (IRR) for the Train law.
This is because the provisions of the Train law are very specific on how and how much excise tax can be levied on the covered products.
New rates posted
Omar Tabasa, manager of Shell Philippines Escario branch, yesterday confirmed they have started implementing the higher excise tax on petroleum products last January 20.
He said they imposed an additional P2.80 per liter on diesel products and P2.97 per liter for gasoline.
The price of their gasoline products now ranges from P50.58 to P51.75 per liter. But one variant of their gasoline product is still an old stock, which means, no excise tax was added to its regular price.
Their diesel product also comes with two variants, which cost P41.22 and P44.92 per liter, respectively.
Tabasa added they also made sure that they were compliant with the Train law by posting a tarpaulin in front of their gasoline station informing their clients about imposition of excise tax.
“You can see in our tarpaulins the different petroleum products that we offer with additional excise tax on its price,” Tabasa said.
Good news
But not all gasoline companies have started implementing higher excise taxes and consequently higher fuel prices.
According to Phoenix Petroleum Philippines Inc. vice president for external affairs Raymond Zorilla, they are still using their old stocks.
“For Phoenix, we have not increased fuel prices in the Visayas with respect to excise taxes because we have yet to deplete our old stock inventory per requirement of the Department of Energy (DOE),” Zorilla, a lawyer, told CDN in a statement.
The DOE-VFO also has another piece of good news for motorists.
Gonzales said that while the international price for petroleum is still high now, it is expected to decrease by the middle of February.
He explained that historically, the trend of petroleum products in the world market is for prices to plummet by February until March, which is spring season in other countries when demand for petroleum products also drops.
“Because February is the start of the spring season of other countries, which would result to a drop of demand from other countries, especially those that are experiencing winter,” Gonzales added.
When the fuel’s world market prices drop, Filipino consumers can also expect lower fuel prices by then, he said.