More belt-tightening moves for businesses as fuel prices go up
Local businesses will have to implement more belt tightening measures, appeal to their employees to help save on unnecessary costs, and think of more ways to sustain productivity.
Steven Yu, Mandaue Chamber of Commerce and Industry (MCCI) vice president for external affairs, cited these actions that businesses would implement to cushion the impact of another round of fuel price increases expected today (Tuesday, Oct. 2).
Yu said in a phone interview on Monday that the latest price increase, which has been among the highest so far, would already be beyond any businessman’s expectations.
In the latest price increase, an additional of between P1.30 to P1.40 per liter of diesel is being imposed.
For gasoline, the increase is between P0.90 to P1.10 per liter while for kerosene, it is also increasing between P0.90 to P1.10 per liter.
On the other hand, the prices of liquefied petroleum gas (LPG) is increasing by between P2 to P2.50 per liter.
This means that for an 11-kilogram LPG tank, the increase is about P22 to P27.50.
“We will really feel the pinch. It is sad, and we need to tighten our belts some more, and we need to increase our sales to sustain our profitability,” Yu told Cebu Daily News in a phone interview.
Antonio Chiu, Cebu Chamber of Commerce and Industry (CCCI) president, also said that with this latest increase, businesses would have to find even more ways to save on other costs.
For businesses to cope with higher fuel prices, they will have to review their operations to find ways of improving efficiencies and cutting down on unnecessary trips,” Chiu told Cebu Daily News.
In an ABS-CBN report, the total price increase of oil products over the last eight consecutive weeks is now at around P4 per liter.
Both CCCI’s Chiu and MCCI’s Yu said that they were hoping and believing that government would look for ways to arrest the continued increase of the prices of other basic commodities as well as that of fuel prices through different mechanisms.
Just this year, the government has imposed additional excise taxes on oil products under the Tax Reform for Acceleration and Inclusion (Train) law.
Under the law, excise tax on regular unleaded and premium gas was increased by P7 per liter this year. It will be further increased to P9 per liter in 2019, and P10 per liter in 2020.
Diesel and bunker fuel are taxed P2.50 per liter this year, P4.50 per liter next year, and P6 per liter in 2020; while petroleum gas increased by P1 every year starting this year until 2020.
However, Chiu pointed out that the Train law has a provision that allows for the suspension of these excise taxes on fuel products.
“The government can also soften the impact by removing the excise tax when the price of oil exceeds $80 in the world market,” he said.
He was referring to Section 5 of the Train law which states that the additional excise taxes on fuel can be suspended when the average price of Dubai crude oil based on the Mean of Platts Singapore (MOPS) for three months prior to the scheduled increase of the month reaches or exceeds US$80 per barrel.
So far the oil price in the world market has not breached this amount.
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