DOF to implement fuel marking scheme

The government will finally implement a Department of Finance (DOF) order mandating the use of a liquid chemical substance to mark imported kerosene and other oil products that enter the country duty-free.  

The fuel marking scheme will be pilot tested at the Subic Bay Freeport Zone, Clark Special Economic Zone and the Port of Batangas, Finance Secretary Margarito Teves said yesterday.

 “We will also launch fuel marking in the ports of Subic, Clark, and Batangas in November,” Teves said.

Customs commissioner Napoleon Morales said the private sector has tapped the services of Switzerland-based SGS (Societe Generale de Surveillance SA) for the project.

SGS, which the BOC previously tapped, specializes in pre-shipment inspection. Without SGS, the Customs bureau is responsible for the valuation, classification and clearance functions for imports.

Morales said the implementation of the fuel marking technology would bear no cost to the government as petroleum players have already agreed to shoulder the expenses. These include members of the Independent Philippine Petroleum Companies Association.

The move is meant to help curb oil smuggling which has translated to at least P4.7 billion in revenue losses for the government from January to July last year.

According to Finance Department Order 23-07, the Bureau of Customs (BOC) will mark imported kerosene and fuel oil products that enter the country duty-free using a liquid chemical substance.

The move is meant to differentiate the imported products and prevent the unauthorized diversion of these into the domestic market.

According to the department order issued in July last year, there is a need to adopt measures to ensure the proper collection of duties and taxes on all fuel oils that enter the Philippines on an exempt basis and to prevent diversion of these products into the domestic market.

The new regulation shall cover all kerosene, including dual purpose kerosene that enter the Philippines and are subject to zero excise tax. It also covers all diesel oil for which exemption is claimed.