DOE to seek suspension of excise tax on oil products

Even before President Duterte announced the possibility of putting the excise tax on oil products on hold, the Department of Energy is already finalizing a draft memorandum seeking its suspension.

"We’re finalizing a formal draft memorandum that we will be submitting to the Office of the President through the executive secretary where we will be seeking the suspension of the second tranche of TRAIN," Energy Assistant Secretary Bodie Pulido said Wednesday.

Under the TRAIN Law, the second tranche of excise tax on petroleum products can be suspended if the average price of Dubai crude averages US$80 per barrel for three months prior to the implementation of the second tranche in January 2019.

“The other indexes are a little bit higher. But the Dubai crude prices, based on our projections, will probably not breach the $80 average per month. And that it would continue for three consecutive months. But based on our projections as well, mukhang aabot po kasi ng tuloy-tuloy na pagtaas up to the following year,” Pulido said.

He added that the expected increase in oil prices is due to an anticipated diminished supply resulting from economic sanctions on Iran and the political and financial crises in Venezuela.

In 2020, the price of diesel is also expected to increase because of higher demand following the implementation of the International Maritime Organization 2020,  which expects seafarers to shift to cleaner fuel for their ships.

Pulido added that Dubai crude is expected to breach the $80 per barrel mark. But even if didn’t, the DOE believes the current situation still calls for a suspension of the second tranche of the excise tax on oil products.

“Posible pa pong mag-breach. Because it’s an average. In fact, over the past three months from July to September, hindi po siya nag-breach ng $80 average per month. Although there were several dates po na pumapatak siya ng $82 to $84,” Pulido explained.

“It was only averaging something like $79.90, $79.80. But considering yung average ay kulang na lang ng mga few centavos, the impact is the same. So logically, since the impact is the same, mas maganda po mag-suspend na,” Pulido added.

If the second tranche of the excise tax on petroleum products is suspended, Pulido said, the DOE believes that the Pantawid Pasada Program should still be continued. — BM, GMA News