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Friday, August 19, 2005
Cost of cooking gas to go up the most due to VAT, gov't admits
EXPECT liquefied petroleum gas (LPG) to bear the brunt of increase in consumer prices once Republic Act (RA) 9337 or the expanded value added tax (e-VAT) law is implemented.
Government lawyers Thursday told the Supreme Court (SC) that fuel costs could go as high as 7.7 percent for LPG while unleaded gasoline may have an 8.6 percent price increase. Meanwhile, regular gas will have a seven percent increase, diesel 2.3 percent, kerosene 6.1 percent, and bunker fuel with 6.7 percent.
In a pleading, the respondents in the e-VAT case through the Office of the Solicitor General (OSG) told the high court that the prices of fuel products may vary based on location, company brand and other factors.
The OSG attached a copy of a memorandum of the Department of Energy (DOE) saying these are just sample computations of petroleum prices when the 10 percent VAT is in place based on pump prices as of August 15.
Energy Undersecretary Peter Anthony Abaya said prices they indicated are "way below the international import prices, thus pump prices may be adjusted upward anytime to reflect true costs."
In its report, the DOE said if the 10 percent e-VAT would be applied, the price of LPG per cylinder may reach P422.92 from its current price of P392.50 or an increase of over P32.
From P32.43, pump prices of unleaded gas will jump to P35.23 per liter; regular gas from P31.44 to P33.65; diesel from P30.45 to P31.15; kerosene from P30.89 to P32.77; and, bunker fuel from P19.48 to P20.78.
The DOE's memorandum was submitted in compliance with the requirement of the court for the government to submit a memorandum explaining the new tax law's effect on consumer prices as well as the implementing rules of the tax law.
The SC is expected to end its deliberations before the end of the month over the freeze order it handed on July 1 against the implementation of the controversial tax measure.
The e-VAT law sought to impose a 10 percent to 12 percent duty on certain items such as fuel, power, transportation and other non-agriculture products.
The tax measure is being blocked by opposition lawmakers, party-list groups and petroleum dealers for being unconstitutional.
During oral arguments last July 15, justices grilled the counsel for oil dealers saying the association immediately passed on to consumers the 10 percent e-VAT on the first day of effectivity of the law on July 1. (ECV/Sunnex)
(August 19, 2005 issue)
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