Anticipated fuel price hikes start off new year

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OIL COMPANIES will be raising the prices of petroleum products this week at rates generally milder than what consumers feared in view of the implementation of the tax reform.

Retailers will be raising the cost of diesel products by P0.65 per liter and gasoline products by P0.20 per liter. They will also raise the price of kerosene by P0.75 a liter. Most will be increasing prices at 6 a.m. today, Jan. 2.

The increase comes as the Department of Energy (DoE) advised consumers a day before the new year about the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) on petroleum prices.

It reminded the public, in an advisory, that the new excise tax rates do not apply to the old stocks of petroleum products. Excise taxes are levied upon importation and not at the point of sale to the consumers, the DoE said.

The advisory by the DoE’s Oil Industry Management Bureau (OIMB) and the Department of Finance (DoF) came amid warnings in some quarters the start of the year will see a spike in prices of basic goods owing to the impending higher cost of petroleum products.

Under the TRAIN, an additional P3 per liter was to be added to the existing petroleum excise rate of P4.35.

The two agencies pointed out, however, that the retailers were still disposing of the old stocks at the start of the year, and these were acquired at the existing rate.

“The OIMB has issued an advisory to petroleum products stakeholders not to levy new excise tax rates on old stocks, considering that excise taxes are levied upon importation and not at the point of sale to the consumers,” officials said.

But for the value-added tax, new rates under TRAIN that are applicable to consumers become effective on Jan. 1, 2018.

With these rates factored in, the price increases for gasoline and diesel this week were higher than the DoE’s expectation, which it based on last week’s international oil trade, excluding Friday’s trading activities.

The DoE expected gasoline prices to increase by only around P0.15 per liter; diesel by around P0.60 per liter; and kerosene by around P0.55 per liter.

It also reminded retailers that upon a declaration of a state of calamity, the DoE is implementing a price freeze on kerosene and household liquefied petroleum gas in some areas of the country.

Provinces struck by recent disasters, however, remain under a price freeze for kerosene and household LPG for 15 days since these areas were declared under a state of calamity.

Parts of the Visayas and Mindanao were struck by back-to-back tropical storms Urduja and Vinta. — Victor V. Saulon with News5/