MOST SERVICE STATIONS are expected to increase fuel prices by the end of January as they sell inventories taxed at higher rates under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The Department of Energy (DoE) made the projection at a presentation to the Senate, which heard testimony on the impact on coal and fuel prices following the implementation of the tax reform law.
“Based on the projections, (half of service stations will raise prices) by the end of the month,” DoE Assistant Secretary Leonido J. Pulido III told Sen. Sherwin T. Gatchalian, who chairs the committee on energy.
The government is monitoring when inventories of key commodities like fuel, which were taxed at the old rates before the end of 2017, are due to run out, to better gauge the timing and impact on price hikes when retailers sell new inventory taxed at higher rates in 2018.
The DoE and the Department of Finance have warned fuel retailers not to raise prices using tax reform as a pretext, particularly if they are still selling 2017 inventories.
At the hearing, Mr. Pulido said the average date for old fuel stocks to run out at the retail level is 15 days after January 1.
He said some service stations have already raised their fuel prices, including those in the Caltex Philippines, Petron Corp., Shell Philippines, and Flying V networks.
Mr. Pulido said tax reform will add P2.97 per liter of gasoline. The corresponding increment for, diesel is P2.80, kerosene P3.36. Liquefied petroleum gas (LPG) prices will rise P1.12 per kilogram.
Also at the hearing, Mr. Gatchalian queried Mr. Pulido regarding the DoE’s efforts to curb possible profiteering from old stock being retailed at higher prices.
Mr. Pulido told Mr. Gatchalian that the Energy department is validating the inventories of oil companies to check when they start selling inventory taxed at new rates.
Mr. Pulido said some oil companies have yet to comply with an order to report their year-end inventories, though the department has responded with random inspections.
In an interview with reporters, Mr. Gatchalian said the DoE should fast-track its validation of the oil companies’ old stock.
“Petroleum is being sold everyday so the process should be quick. What is important is that we should know that the government is doing its job to protect consumers,” he said. — Camille A. Aguinaldo
