No need to slash tariff on crude oil imports – Teves
Import duties will only be cut to two percent from three percent if the price of Dubai crude averages at $91.92 per barrel in one month and if diesel prices hit an average price of $94.1 per barrel, Teves said.
These would further be reduced to one percent if the average price of Dubai Crude hits $104.83 billion per barrel in one month, he added.
The Finance chief made the announcement as the DOF set trigger prices for the government’s plan to reduce tariffs on imported oil products. The move is to help cushion the impact of rising crude prices on Filipino consumers.
However, Teves said the prevailing prices have not hit the government’s trigger points. The price of Dubai crude averaged $76.83 per barrel from Oct. 1 to Oct. 29, he noted.
The trigger prices were based on a 44 to $1 foreign exchange rate assumption. The prices will also ensure that the government will not incur any revenue loss.
“The effect will be revenue neutral,” Teves stressed.
To implement the scheme, President Arroyo would have to issue a new executive order while Congress is in recess.
Last year, Malacañang issued Executive Order 527 which brought down the tariff on imported crude oil from three percent to two percent, a move that was aimed at helping consumers cope with rising crude prices.
Based on the guidelines of the old EO, a one percent tariff was imposed on crude and petroleum products should the average price of both Dubai crude and MOPS-based diesel over a two-week period reached $75 per barrel and $88 per barrel.
On the other hand, the two percent tariff was imposed on crude and petroleum products should the average price of both Dubai crude and MOPS-based diesel reach $66 per barrel and $88 per barrel.
Furthermore, a zero percent tariff was levied on crude and petroleum products should the average price for both Dubai crude and MOPS-based diesel reach $85 per barrel and $88 barrel.
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