Philippines Dept of Energy Update on Fuel Excise Tax

Philippines Dept of Energy Update on Fuel Excise Tax

The Department of Energy (DOE) said efficient business operations and competition would best address an expected hike in the prices of petroleum products due to the upward adjustment in excise tax.

“[The excise tax] is going to be a pass on to consumers. We can’t do anything about that. But it has been proven that what can best bring down prices is competition and efficiency. Those two will drive prices down,” Energy Secretary Alfonso G. Cusi said. Mr Cusi urged oil firms “to be efficient in its operation so that consumers will support their products”.

Based on the proposal, the excise tax on diesel will initially be P3 per liter, and will increase to P5 on January 1, 2019, and to P6 on January 1, 2020. The same will apply to kerosene, liquefied petroleum gas and bunker oil, which is used for producing electricity. The pending tax proposal also seeks an increase in the existing taxes on other petroleum products, like fuels, lubricating oils and greases to P8 per liter or kilogram in 2018, P9 in 2019 and P10 in 2020.

“For SPUG [Small Power Utilities Group] areas, it will increase by P1.60. This is the effective increase in electricity rates for diesel-consuming plants. For oil prices, the estimate is between P7 to P9,” Cusi said.

The Independent Philippine Petroleum Cos. Association  (Ippca) is expecting fuel prices to surge by P7.65 as a result of an impending increase in excise tax on all petroleum products and increase in locally produced ethanol. “With the increase in excise taxes compounded by the increase in prices brought about by the requirement of exhausting locally produced bioethanol, the general public bears the burden of the astronomical rise in fuel price amounting to [P7.65] by the year 2019 for fuel,” Ippca said in a draft letter to Congress.

Seaoil Philippines said it would abide by what the law states. “It’s a pass-on cost for us. We will just implement what the law says,” Seoil CEO Glenn Yu said.

The Philippine government conveyed to the European Union (EU) and World Bank that it is pursuing its thrust to promote energy efficiency, sustainability and total electrification. This was the message conveyed by Cusi during the joint planning workshop for the Supported Access to Sustainable Energy Programme (Asep) held from August 30 to September 1 at Camp Punta Fuego in Nasugbu, Batangas.

“The DOE is prioritizing the delivery of quality energy service to our people, not only in the business districts but also in the rural areas,” Cusi said.

The EU earlier allocated €60 million,  or P3.3 billion, in support of the Philippine government’s 100-percent electrification target by 2022.

The objective of the Asep is to assist the Philippines in expanding sustainable energy generation to meet growing economic needs and provide energy access to the poor and marginalized sector in accordance with the Philippine Development Plan.

The objective was also emphasized during the Philippine-EU Asep conference held on March 9, signaling the start of the joint undertaking between the DOE, EU and World Bank.

The workshop aims to reacquaint the participants with the organizational structure and implementation mechanism of Asep and its components to improve interagency coordination and streamlining of the overall implementation process.

Asep will be implemented through three components: Component 1, the “Technical Assistance and Capacity Building Pillar”, Component 2, the “Investment Support” managed by the World Bank; and Component 3, the “Call for Proposals for Pro-Poor and Climate Resilient Innovative Energy Solutions” directly managed by the EU delegation.

“With all the program’s key players gathered in one venue, we aim to seek each other’s concerns, insights and suggestions to be more synergized in our approach toward carrying out the Asep,” Cusi said.

The DOE expects the participants to be more updated on the different implementation mechanisms and roles of Asep players after the joint planning workshop with hopes that this will further strengthen the agency’s E-Power Mo Campaign, designed to empower consumers by providing them information and options on the intelligent utilization of energy resources.

The Philippines Dept of Energy particpated in the 1st Asia Fuel Retail Conference held in Kuala Lumpur during June. Renante Sevilla who presented an excellent overview of the Philippine fuels market and the current process of monitoring the fuel retail network which has doubled in size since 1997. PetrolWorld will publish an article based on this presentation in early 2018. PW050917

Last modified onMonday, 04 September 2017 16:27
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