The Energy Department will study the proposed additional excise taxes on gasoline and diesel, an official said Thursday.
Energy spokesman Felix William Fuentebella cited a need to further study the proposal “because it will definitely lead to an increase in pump prices.”
“It will also be subjected to 12-percent VAT [value added tax]. For 2015, the DoE data show that the country’s consumption of gasoline was 5.22 billion liters, while diesel was 9.34 billion liters,” he said.
Fuentabella said ultimately, Congress would have to decide on the issue.
The Finance Department earlier disclosed a proposal to increase excise taxes on fuel products amid the slump in global oil prices.
Finance Secretary Carlos Dominguez III said “now is the time to do it, because the price [of fuel] is low.”
“We have to [adjust], because [the last adjustment] was set in 1997. It’s P4.50, something like that since then. P4.50 then [is] not worth as P4.50 right now. So we have to adjust it, at least to index it,” he said.
The proposal came after Independent Philippine Petroleum Companies Association founding chairman and president Fernando Martinez asked the government to increase taxes on petroleum products.
“There is an excellent opportunity for the next administration to impose a specific tax of around P3 to P5 in all petroleum products,” Martinez said.
Martinez, who is also the chairman and chief executive of Eastern Petroleum Corp., called on the previous Aquino Administration to implement the proposal, after global petroleum prices plunged by more than 40 percent.
Martinez said the government could generate between P40 billion and P75 billion annually in specific taxes, as the country was consuming 100 million barrels a year.
He said the additional specific tax and value-added tax could bring the overall petroleum taxes close to P150 billion annually, or enough to sustain infrastructure development and modernize roads and bridges.
Martinez said the proposed increase in petroleum products from P3 to P5 per liter would not be enough to justify any hike in transport fare.
He said diesel prices were estimated to remain within P30 per liter and gasoline below P45 per liter, despite the proposed tax adjustment.
“In 2008, gasoline prices hit P60 per liter at around $100 per barrel, while diesel was at P50 per liter, which brought the fare to its current rate except for the voluntary rollback called for by the transport sector,” Martinez said.
