Suspension of 3% excise tax eyed to keep oil prices down

Oil companies are closely studying a proposal to suspend the three-percent excise tax on crude oil and its refined petroleum products.

"We are looking at the planned suspension of the excise tax as it would have a bearing on future price adjustments," said Oscar Reyes, country chairman of Pilipinas Shell Petroleum Corp.

He said the proposal may not have a major impact on prices but it will have a bearing on consumers as it could result in a reduction of P0.04 to P0.05 per liter in the prices of petroleum products.

"But we are still studying it," Reyes said, adding that they favor anything that may lower the negative impact of increased fuel prices.

Oil companies are once more looking at another round of price adjustments as Dubai crude remained at $30.24 per barrel, the highest monthly average this year.

Energy Secretary Mario V. Tiaoqui told newsmen that the energy department has endorsed the proposal for a three-month suspension of the excise tax on crude oil and refined petroleum products. Earlier, the National Economic and Development Authority (NEDA) endorsed the proposal of the energy department.

However, the Department of Finance (DOF) and the Department of Budget and Management (DBM) strongly opposed the proposal as it would result in a revenue loss of at least P420 million a month for the National Government.

Tiaoqui said the suspension of excise tax does not require legislative action unlike in the case of a specific tax which requires the nod of Congress.

The proposal, according to the energy secretary, needs only to be heard by the Tariff Commission in a public debate before it could be forwarded to the DOF for finalization and formulation into an executive order.

Tiaoqui expressed optimism that the process will not take long. "We see the approval into a law within the year." – Ted Torres