ALTHOUGH the second tranche of the oil excise tax under the Tax Reform for Acceleration and Inclusion (Train) Act will take effect on Tuesday, Jan. 1, the Department of Energy (DOE) Visayas warned oil stations in Cebu not to raise prices until all the 2018 stocks are sold.
President Rodrigo Duterte has approved the additional excise tax of P2.24 per liter for diesel and gasoline under the Train Law, or Republic Act 10963.
Under the second tranche, the additional excise tax was supposed to be P2. But because the Train Law imposes a tax on tax, the increase was levied the 12-percent value-added tax, so the P2 increment became P2.24.
According to the DOE, diesel will be taxed P4.50 per liter; gasoline, P9; liquefied petroleum gas (LPG), P2; bunker fuel, P4.50; other oil products like asphalt and waxes, P9; and aviation fuel, P4.
Rey Maleza of the DOE Visayas Energy Industry Management Division, said his agency already instructed all oil companies to unload first all 2018 stocks before implementing the additional increase.
“Our Oil Industry Management Bureau is closely monitoring the situation with other concerned agencies,” he said.
Under the DOE’s Department Circular 2003-01-001, or the Implementing Guidelines for the Minimum Inventory Requirements of Petroleum Oil Companies and Bulk Suppliers, oil companies must have a minimum inventory of 15 days’ worth of petroleum products.
Maleza said the DOE is coordinating with the Department of Finance, Bureau of Customs and the Bureau of Internal Revenue to devise a mechanism to closely monitor existing inventories.
DOE Secretary Alfonso Cusi, in his separate press statement, said they are looking at the 2018 inventories of all oil companies to protect consumers from unjust trading and profiteering once the second tranche is implemented.
Meanwhile, Department of Trade and Industry (DTI) 7 Director Asteria Caberte told SunStar Cebu that the monitoring of prices on all products is ongoing.
“Based on our spot monitors, there is no advice of price hikes. No price movements noted,” Caberte said.
The DOE and DTI were urged to monitor the prices of fuel because the second tranche of the Train Law is expected to cause a domino effect on prices of products and services.
The Train Law imposes a fuel tax spread out over three years. In the first tranche, which took effect in 2018, excise tax on gasoline was increased to P7 a liter from P4.35, while new tax of P2.50 a liter was imposed on diesel, P3 on kerosene and P1 per kilogram on LPG.