THE SUSPENSION of additional increases in fuel excise tax next year will continue even amid signs that international oil prices will not breach $80 per barrel in the last quarter of the year, Finance Assistant Secretary Antonio Joselito G. Lambino II said.
In a briefing at the Palace on Wednesday, Secretary Alfonso G. Cusi of the Department of Energy (DoE) also announced that fuel prices, for the fifth consecutive week, “will be rolled back again next week because of the improvement in the price of oil in the international market.”
On the oil price outlook for the coming months, Mr. Cusi said: “We are very dependent on what is happening in the international market, so our information is based on the forecast of the developing, producing and exporting countries. If I would just share with you what the forecast for the coming months, it said that it would remain at the $70 level — I mean, low 70s and the high 70s.”
In a chance interview, he also said: “That would be the forecast for the last quarter and also for next year. That is on the basis of the current production volume capacity.”
During the briefing he explained that the basis of this forecast is “the softening of the sanctions imposed by the US against Iran.”
The US, Mr. Cusi said, has issued a waiver to eight countries to continue importing oil from Iran.
He added that the US “is maximizing its production, as well as Saudi Arabia. So with those volumes, we hope that would keep the price within the $70 range,” he said.
The tax reform law calls for the suspension of scheduled excise tax increases if the Dubai crude benchmark hits or exceeds $80 per barrel, but the government’s economic team, under pressure over rising inflation, opted to recommend suspension of the fuel tax increase even before the three-month threshold required by law.
Asked for comment during the briefing, Mr. Lambino said: “As you know, the economic managers submitted their recommendation to suspend the next tranche of the increase in excise [tax on fuel] scheduled for January 2019. That recommendation stands.”
He said that this recommendation “was made when the price per barrel for Dubai crude and MoPS (Mean of Platts Singapore, a widely-followed basket of oil prices) was above $80, and the futures markets also showed $80 and above for November and December.”
“Futures prices until the end of the year were also above $80 at the time the recommendation was made,” he added. “Ideally, the recommendation will be reviewed after it is implemented… at some point next year.” — Arjay L. Balinbin