Monday, March 10, 2008 Groups: Scrap oil deregulation, vat on oil! By Karl G. Ombion
IN THE light of another wave of increases in the prices of petroleum products, basic goods and services, militant transport groups here have renewed their call for the immediate scrapping of the oil deregulation law and the government's nationalization of the country's oil industry.
United Negros Drivers and Operators Center (UNDOC) Deputy Secretary General Nilo Frias slammed anew the government for its "inutility in stopping the hikes of petroleum products and surge in the prices of basic commodities and services."
The prices of petroleum products in the country have recently been hiked by P.50 cents after crude oil in the international market has soared to $105 per barrel, the highest this year.
"This is already the 6th hike for this year; and the way we started the year it seems we are in for a far worse situation in the coming months," Frias said.
"The oil monopolies rolled back once or twice their products but it had no effects, and worse they get back on us with more and bigger hikes," he added.
He explained that the government's downstream oil industry deregulation law of 1997 remains the biggest catastrophe not only to the transport sector but the entire people.
"It has resulted to unstoppable hikes in all oil petroleum products because the government has no more regulatory powers to check on the abuses of the top oil players in the country, especially the oil cartel led by Caltex, Petron, Shell," Frias added.
Meanwhile, IBON executive director Rosario Bella Guzman also called for the immediate removal of the 12% value-added tax (VAT) on oil products to give immediate relief to poor Filipinos from the new wave of price hikes of petroleum products and basic goods.
Guzman in a statement to Sun.Star Bacolod pointed out that the recent round of oil price hikes is more than enough to remove the VAT on oil products, particularly in the wake of the recently released official poverty figures showing that the number of poor Filipinos is increasing.
It has been estimated that if the 12% VAT on oil products were removed, pump prices could go down by P4 a liter and liquefied petroleum gas (LPG) by P60 per 11-kg cylinder.
"These could help the millions of poor Filipinos through savings on their fuel bills," Guzman pointed out. "Fuel-intensive local establishments would also benefit through lower production costs."
In 2006, the government earned P49.15 billion from VAT on crude and petroleum products. This could easily be offset through revenue measures that are less burdensome to Filipinos, such as plugging tax leakages. In the same year, government lost P82 billion in uncollected corporate income taxes and an average of P57 billion annually in uncollected VAT.
