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Random fuel mark tests start June

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THE FIRST ROUND of field tests for marked fuel is scheduled to start in June, with authorities expecting to cover at least 15 billion liters this year and crack down on other smuggled petroleum products.

In a media briefing, officials of the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR) said they are on track with rolling out the fuel marking program next month, and initial random testing in oil depots and even retail stations “three months after.”

“We are almost done with the IRR (implementing rules and regulations). It’s just that we can’t issue the IRR unless the fuel markers are approved by the BoC and BIR,” Deputy Commissioner for the Customs’ Enforcement Group Teddy Sandy S. Raval told reporters yesterday.

Fuel marking involves use of low concentrations of dyes to be blended with fuel in order to determine whether shipments have gone through legal import channels.

The measure is provided under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law, which took effect Jan. 1, 2018.

Marked fuel will show that importers of petroleum paid the required tariffs and went through all necessary steps before selling their products to the market.




The DoF tapped the joint venture of Switzerland-based SICPA SA and SGS Philippines in October as service provider for the fuel marking program. They are tasked to provide a unique chemical marker for gasoline, diesel and kerosene and also administer the tests on these products.

Customs expects about 6.8 billion liters of gasoline, diesel and kerosene to be imported this year, while the BIR projects some 8.4 billion liters of these products to be churned out by local refineries.

Mr. Raval said the bureaus are also waiting for approval by the Department of Energy for placing markers on fuel products, citing the need to ensure that these dyes will have no impact on fuel efficiency and emissions.

Citing previous studies, the Department of Finance (DoF) has said it expects to capture at least P20-40 billion worth of foregone import duties from smuggled or misdeclared petroleum products each year through the marking scheme.

The government has earmarked P1.96 billion for the program’s first year of implementation. However, the system is expected to be sustained through a Fuel Marking Trust Fund, to be supported by the collection of a fuel marking fee of P0.06884/liter.

The TRAIN law provides an initial five-year contract for fuel marking.

Emee I. Macabales, director of DoF’s Revenue Operations Group, added that the bureaus plan to deploy 20 mobile analyzers to do the random fuel tests nationwide, which would translate to around three tests per day covering up to 8,000 retail gas stations.

The machines will detect whether the samples are compliant, non-compliant or adulterated — the latter being the result of mixing of marked and unmarked fuel.

If the sample fails, a confirmatory test will be done before it is subject to apprehension and penalties, which are still being finalized by regulators.

Steve Harrison, global operations manager for SGS’ fuel integrity programs, said they usually see a high level of non-compliant fuel distributors in the first few months after shifting to the marking scheme.

“We usually find that within the first months or one year when we start testing, the number of non-compliance reduces… Most people are not criminals, they are opportunists,” Mr. Harrison said.

He added that safeguards are in place to ensure that the fuel markers which they will use are unique and cannot be purchased by other parties to keep the process intact.

The BIR said it will likely be tapping staff members assigned in respective regional offices to do the field tests, while the BoC will use or even increase their personnel for the Enforcement Service units across all 17 Customs ports.

In a separate development, Customs also said that steps are being taken to address congestion at the Manila International Container Port.

In a statement, the bureau said the International Container Terminal Services, Inc. has been ordered to repair the bay doors of examination areas in order to fast-track the release of shipments, as well as the transfer of overstaying containers to an inland depot to decongest the yard.

These are quick fixes pending issuance of a new Customs order that would tighten the rules on storing empty containers. Proposals include stricter enforcement of the 90-day limit for these containers, as well as requiring international shipping firms to stow them in depots outside Metro Manila. — Melissa L. T. Lopez