Transport groups seek halt to excise tax on fuel despite price cuts

By Russell Louis C. Ku

TRANSPORT WORKERS urged Congress to suspend or lower the excise tax on fuel products, saying the recent decline in global oil prices was nothing compared with the overall rise this year.

Oil prices increased 10 times from Aug. 30 to Oct. 22, said Mody Floranda, president of the Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide (PISTON). He noted that local diesel prices rose by as much as P18.50 a liter, while gasoline prices increased by as much as P22.50.

Declining global oil prices might be temporary, he said by telephone on Dec. 2, adding that he expects the petroleum prices to increase again in the next three months due to increased demand amid easing lockdowns.

On Tuesday, oil companies lowered the price of gasoline by P2.40 a liter, while diesel and kerosene prices fell by P2.65 and P2.70, respectively.

Mar S. Valbuena, president of the Samahang Manibela Mananakay at Nagkaisang Terminal ng Transportasyon, said the suspension of the excise tax would help drivers whose livelihood had been affected by the coronavirus pandemic.

“We don’t earn much because there are few passengers,” he said by telephone in Filipino on Dec. 3. “There are also costs we have to worry about such as maintenance and parts for our vehicles.” He added that public utility vehicle drivers earn as little as P150 a day.

House Bill 10488 seeks to temporarily scrap the excise taxes on diesel, kerosene and liquefied petroleum gas (LPG) for six months.

The excise tax on low-octane gasoline will be lowered to P4.35 a liter, while the tax on premium gasoline will stay.

Fuel tax will revert to rates under the Tax Reform for Acceleration and Inclusion (TRAIN) Law once global crude oil prices hit $65 a barrel.

The law raised the excise tax on fuel in three tranches from 2018 to 2020. The tax rates are P10 a liter for gasoline, P6 a liter for diesel, P5 a liter for kerosene and P3 a liter for LPG.

The Department of Finance has opposed the House bill, saying it would result in P37.5 billion in foregone revenue and only help the rich.

But Mr. Floranda and Mr. Valbuena said scrapping the excise tax would benefit both the rich and poor.

Mr. Valbuena said lawmakers should come up with a compromise. “The suspension will be temporary, so for the meantime the government should find other ways to recover the lost revenue during the six-month period.”

The industry is also amenable to cutting the suspension period to four or five months, he added. He said Congress could limit the suspension of excise tax to public utility vehicle operators.

Mr. Floranda said changes to the Oil Industry Deregulation law would also help stabilize fuel prices.

Pampanga Rep. Juan Miguel M. Arroyo, who heads the House energy committee, has filed House Bill 10505, which will require oil companies to maintain a minimum inventory of 30 days. They must also disclose their costs from importing fuel.

As of Nov. 30, year-to-date pump prices for gasoline and diesel have increased by P18.10 a liter and P15.70 a liter respectively, according to data from the Department of Energy.