Oil firms oppose fuel-marking scheme

MANILA, Philippines - Oil companies are opposing the implementation of the fuel marking scheme on fuel imports on concerns this could result in additional costs to consumers.

Originally eyed last month, the Bureau of Customs (BOC) is delaying the implementation of the new scheme aimed to arrest revenue losses from oil smuggling before the year ends.

“We’re hoping it will be implemented by year-end,” BOC commissioner Alberto Lina said in an interview with The STAR.

Under the new system, imported kerosene and diesel products whose taxes have already been paid would carry the markings, making it easier for the bureau to identify smuggled oil products.

However, oil companies would shoulder the cost of the fuel marking technology estimated at $25 million, the subject of their opposition, the BOC chief said.

Oil firms cited the marking cost may be added on top of the fuel selling price as a reason, he noted.

“Oil companies are negotiating with us to lower the cost,“ Lina said. “If they pay the marking cost, prices of oil may increase. That’s what we’re weighing in our decision because it will affect consumers.“

Last July, the BOC started preparing the terms of reference for project in which a contractor would be hired to mark oil products entering the country.

The fuel marking scheme will be tested first in Visayas and Mindanao before requiring it nationwide.

The agency stands to generate $300 million in fresh revenues with this project as it is expected to reduce smuggling in the country, Lina had said earlier.