Duterte imposes additional 10-percent duty on petroleum
MANILA, Philippines — The government will impose an additional 10-percent duty on crude petroleum oil and refined petroleum products to raise funds for its coronavirus response efforts.
The modification of import duties is contained in Executive Order No. 113 signed by President Rodrigo Duterte last May 2.
The president signed the order two days before Congress resumed session.
Under the Customs Modernization and Tariff Act, the president, upon the recommendation of the National Economic and Development Authority (NEDA), may increase, reduce, or remove existing rates of import duty including any necessary change in classification. The power delegated to the president shall be exercised only when Congress is not in session.
The executive order was in line with the Bayanihan Act, which cited the urgent need to undertake a program for recovery and rehabilitation, provide safety nets to all affected sectors, and ensure that there is enough funds to implement them.
"There is an urgent need to augment the government's resources to sufficiently finance the programs and measures to mitigate the effects of the COVID-19 situation, and launch the country towards recovery and rehabilitation," Duterte said in the order.
The order also comes at a time when demand for oil has slumped because of lockdown orders and the suspension of work in many industries.
As of April 13, 3.4 billion liters of oil had been stocked up in the country’s 133 depots, refineries and storage facilities, filling up 58.6% of 5.8-billion-liter capacity.
The NEDA Board approved the temporary imposition of an additional 10-percent duty on imported crude oil and refined petroleum products last April 8. The articles covered by the order shall be subject to a temporary additional import duty of 10 percent on top of their existing Most Favored Nation and preferential import duties.
The modified rates shall immediately revert to zero percent if international oil prices increase based on trigger prices indexed to oil prices in the world market and upon a certification by the energy department that a trigger price has been reached.
The articles that will be subjected to the 10-percent additional duty include petroleum oils and oils obtained from bituminous minerals namely crude petroleum oils and condensates.
Also covered are petroleum oils and oils obtained from bituminous minerals other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; and waste oils.
Products under this category that will be subjected to additional duty are light oils and preparations including leaded motor spirit of RON 97 and above, RON 90 and above but below RON 97, and other RON; unleaded motor spirit of RON 97 and above that are unblended, blended with ethanol, and others; unleaded motor spirits of RON 90 and above but below RON 97 that are unblended, blended with ethanol and others; and unleaded motor spirit of other RON that are unblended, blended with ethanol and others.
Also covered by the order are naphtha, reformates and other preparations of a kind used for blending into motor spirits alpha olefins, other petroleum spirit having a flashpoint of less than 23 degrees Celsius; lubricating oil feedstock, lubricating oils for aircraft engines, other lubircating oils and lubricating greases automotive diesel fuel, other diesel fuels, fuel oils, jet fuel having a flash point of 23 degrees Celsius or more, jet fuel having a flashpoint of less than 23 degrees Celsius, other kerosene, and other medium oils and preparations.
Other products that will be subjected to additional duty are petroleum oils and oils obtained from bituminous minerals other than crude and preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, containing biodiesel other than waste oils; petroleum gases and other gaseous hydrocarbons namely liquefied natural gas, propane, buranes, ethylene, propylene, butylene and butadiene, ethylene; natural gas in gaseous state used as a motor fuel and other types.
The energy department, in coordination with the finance and trade departments, NEDA, and customs bureau will promulgate implementing guidelines of the order.
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