OIL companies should start increasing its fuel imports to fill in the vacuum left by Pilipinas Shell Petroleum Corp. (PSPC) if it opts to shut down its refinery in Batangas as a result of the tax issues with the Bureau of Customs (BOC).

Raul Concepcion, chairman of the Consumer and Oil Price Watch (COPW), said the ongoing rift between Shell and BOC could also cause problem on future investments in the country.

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“Petron and other oil firms should be able to increase their importations to cover the country’s oil requirements and fill the void that may be created by Shell’s shutdown,” Concepcion said during a news conference.

Concepcion also asked President Gloria Macapagal-Arroyo to resolve the tax row the soonest possible time.

“No foreign investment will come in if President Arroyo will not resolve this,” he said. “The President must resolve this issue (at once).”

Similarly, Concepcion agreed to the claims of Shell that BOC is imposing “double taxation” in implementing excise tax and taxing the imported Catalytic Cracked Gasoline (CCG), which is a raw material being used as ingredient to process gasoline and other fuel products. "

“I agree with Shell. That would be double whammy,” he said.

Simeon Marcelo, Shell’s lawyer, said BOC’s insistence of double taxation will cause the “looming supply shortage.”

He stressed that “our economy should not be sacrificed as it finds ways to plug their collection shortfall.”

Customs threatens to seize the P43 billion imported CCG of Shell arriving next month to force the company to settle its disputed P7.3 billion tax deficiencies covering the period 2004 to 2009.

At the same time, the consumer advocate also warned the Department of Energy from making pronouncements on looming supply shortage saying it may result to "panic which in turn may cause the prices to go up."

Shell officials said they may shutdown their refinery in Batangas if BOC will proceed with the plan seizure of their imported raw materials.

Shell secured a temporary restraining order with the Court of Tax Appeals last December.

The 60 days TRO is expected to lapse by February 9, 2010.

“The matter is already before the Court of Tax Appeals. We hope that the CTA will intervene before February 9 to stop the planned seizures by Customs,” Marcelo said.

Shell has 34 market share and employs nearly 18,000 workers all over the country. (MSN/Sunnex)