Government moves to avert new oil price hike

President Estrada has approved the suspension of the three percent import duty on crude oil and refined gasoline products to avert another increase in fuel pump prices.

Members of the Economic Coordinating Council made the recommendation during a meeting Wednesday night with Executive Secretary Ronaldo Zamora, who represented the President.

Trade Secretary Jose Pardo disclosed that the President has ordered Zamora to prepare the draft executive order, which would be signed as soon as Congress adjourns tomorrow.

"Since any imposition or suspension of tax is a congressional power, the President can only effect such a measure if Congress is not in session," Pardo said.

He noted, however, that the suspension of the three percent duty will still be subject to public hearings by the Tariff Commission.

"We are recommending the suspension on a temporary basis. It will give us sufficient time to prevent the next round of increases. This is not a political decision but an economic reality since the price of oil has really gone out of line," he said.

The recommendation came amid talks of another price increase brought about by tension in the Middle East combined with the seasonal stockpiling of oil by western countries.

The high demand for oil could jack up pump prices by another P1 per liter.

Suspension of the tax had been met with stiff opposition from some economic managers, who had warned of a bigger budget deficit from the expected loss in revenue.

At present, the Bureau of Internal Revenue collects P5.35 in excise tax per liter of premium gasoline, P3.35 for unleaded and regular gasoline, P1.65 for diesel, 60 centavos for kerosene and P3.67 for aviation fuel.

Last year, the government collected some P29.9 billion, or P82 million a day, from the excise tax on the six oil-based products.One lawmaker has noted that a P1 reduction in the excise tax on gasoline will cost the government P774 million a month, or roughly P9.2 billion a year.