Measures pushed vs fuel price spikes

September 23, 2023 Ryan Ponce Pacpaco 115 views

CAMARINES Sur Rep. LRay Villafuerte is pushing congressional measures designed to slash the ever-rising pump prices of petroleum products, as Speaker Ferdinand Martin G. Romualdez met last week with top executives of oil companies in the hope of finding a “win-win” solution to ease the impact of the global oil price shock on Filipino consumers.

With fuel prices expected to remain on their upward trajectory until end-December 2023, Villafuerte, National Unity Party (NUP) president, has called on the 19th Congress to “take a long hard look” at pending measures on hefty cuts in diesel and gasoline taxes.

“We fully back the efforts of Speaker Martin (Romualdez) to find a ‘win-win’ solution to the nonstop upward adjustments in gasoline and diesel prices, which is partly responsible for this year’s elevated rate of commodity price spikes that has breached the government’s inflation target of 2% to 4%,” Villafuerte said.

“And in support of the Speaker’s initiative, I am appealing to fellow lawmakers to take a long hard look at House Bill (HB) 8231 and HB 5176 that both seek to overhaul the NIRC (National Internal Revenue Code) to freeze, reduce or do away altogether with the taxes imposed on petroleum products for the benefit of Filipino consumers,” Villafuerte, who represents Camarines Sur’s second district in the House, said.

Villafuerte issued this statement after Speaker Romualdez and other House leaders held a consultative meeting Monday at the Batasan Pambansa complex with top executives of the Department of Energy (DOE) and of oil companies to come up with what the Speaker called a “win-win solution” for the people and industry players.

Speaker Romualdez said in a statement earlier that: “No one is spared from the ill effects of the high cost of living due to oil price hikes.

But this is beyond anyone’s control … (So) we want to sit down with these oil companies and discuss ways or suggestions on how we can alleviate the hardships of our fellow countrymen due to the constant rise in petroleum prices, and find common ground in areas that are within our control.”

The Speaker and other House leaders met on Sept. 18 at the Batasan Pambansa complex with executives of Petron Corp., Pilipinas Shell Petroleum Corp., Chevron Philippines Inc., Flying V, Total Philippines Corp, Independent Philippine Petroleum Companies Association (IPPCA) and the Philippine Institute of Petroleum (PIP).

“I hope we can work together to help our people,” said Romualdez during that meeting as he: (1) suggested to oil companies to find ways of cutting their profit margins, and (2) bared the House ‘s readiness to recommend adjustments in oil tax policy to the President as a way to slash gasoline and diesel prices.

A day after the Speaker’s consultative meeting with oil industry executives, fuel companies raised pump prices big time by P2.50 for diesel and P2 for gasoline, as the international benchmark Brent crude rose significantly to $93 a barrel from the previous week’s $89, triggering speculations that the rate could hit $100 in the coming months.

The September 19 rate adjustments marked the 11th fuel price increases by local oil companies in the same number of weeks amid the rising demand for oil in the world market and the continuous supply output and export cuts by the Organization of Petroleum Exporting Countries (OPEC) and its allies.

To cushion the effect of the oil price spirals on Filipinos, Villafuerte had introduced HB 5716 to make permanent the temporary provision in Republic Act (RA) 10963—the Tax Reform for Acceleration and Inclusion (TRAIN) Law—that stopped the previous Administration from collecting the excise tax on fuel products whenever the average per-barrel cost of Dubai crude oil, based on the Means of Platts Singapore (MOPS) rate, reached $80 over a three-month period prior to the planned suspension of the tax collection.

The TRAIN Law’s provisional authority to suspend the fuel excise tax whenever the $80-price cap is breached ended in 2020, said Villafuerte, who was one of the authors of RA 10963.

He said that HB 5716 seeks to amend Section 148 of the NIRC to provide for “the automatic suspension of the excise tax on regular gasoline, unleaded premium gasoline and diesel fuel oil” whenever the $80-per-barrel threshold is breached over a three-month period.

He said that HB 8231 proposes, meanwhile, to amend various sections of the NIRC of 1997 by imposing a temporary suspension for three years of, or a 50% cut on, certain tax payments, to lower the pump prices of fuel as well as electricity rates.

This bill aims, he said, “to mitigate the effects of the imposition of VAT and the increased excise taxes on petroleum products and coal that are too much of a burden on the consumers and businesses as we recover from the economic scarring caused by Covid-19 and the sticky elevated inflation.”

It proposes to amend Section 109 of the NIRC by exempting from VAT payment the system loss charge in the sale of electricity for a period of three years from the date of effectivity of this Act.

It also wants to amend Section 148 of the NIRC by reducing by 50% for three years the excise tax payments on petroleum products.

Moreover, it aims to cut by half, also for three years, the excise taxes on coal, and to suspend for the same period the collection of applicable duties on imports of coal and petroleum products.

The bill provides that within 30 days from the effectivity of this proposed Act, the Secretaries of the Departments of Energy (DOE) and of Finance (DOF) shall, upon the recommendation of the Commissioner of the Bureau of Internal Revenue (BIR), promulgate the necessary implementing rules and regulations (IRR) for its effective implementation.

Villafuerte had long called on the DOE to act on a government plan to establish a strategic petroleum reserve (SPR) facility to help shield motorists and commuters from volatile fuel prices.

Before Tuesday’s spike in petroleum products, the DOE had reported that the year-to-date per-liter adjustments totaled P15.50 for gasoline and P11.10 for diesel.

In mid-September, the prevailing pump prices in Metro Manila ranged from P61 to P81.75 per liter of gasoline and P60 to P71.54 for diesel.