DOE, DOF to lead inter-agency task force versus oil smuggling

MANILA, Philippines - The Department of Energy (DOE) and the Department of Finance (DOF) will spearhead the creation of an inter-agency team that would specifically focus on oil smuggling.

Energy Secretary Jose Rene Almendras said they have seen the need to intensify moves to immediately address and zero in on oil smuggling which is costing billions of pesos of losses to the government.

 “The degree of smuggling is still being discussed. One study is talking about P60 billion while another study is talking of P20 billion. We are in the process of rationalizing and investigating to what extent oil smuggling is,” he said.

He said they have recognized that oil smuggling should be given much attention.

 “Burning issues or most pressing problems of the upstream and downstream is really the aspect of oil smuggling. We have been reminded by oil sector players that they expect the government to step up initiatives and address the oil smuggling problem in the country,” he said.

Under the previous administration, the DOE addressed the issue of oil smuggling through a Presidential Task Force on the Security of Energy Facilities and Enforcement of Energy Laws and Standards (PTF-SEFEELS).

A few days after Almendras took office, he said they would abolish all the task forces created under the past administration.

He said they expect to set up the new task force soon. “Together with the DOF and spearheaded by Bureau of Customs (BOC), we hope to activate this inter-agency task force within the month so we can start as soon as possible,” he said.

Almendras also admitted that since the industry is deregulated, the authorities have limited access to the petroleum players’ operations.

 “Just to explain the degree of impact, in the Visayas and Mindanao, pump prices are higher by P5 per liter in some areas. The department is very aware of this but unfortunately, because this is a deregulated industry, we cannot do much,” he said.

The energy chief noted the importance of curbing oil smuggling in relation to the tax collection efforts of the government.

 “One of the reasons for that significant difference is the problem of oil smuggling. It has a very significant impact on pump prices not only at the industry level, but on the ground. The biggest challenge to the government is the tariff loss and VAT losses that occur because all these smuggled oil does not get captured,” he added.