The Senate committee on energy has disapproved the proposal of consumer groups to remove the value-added tax and excise tax on fuel products, as mandated under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
“It will be difficult to remove the VAT and the excise taxes because the government is generating revenues from that,” Senate committee on energy chairman Sherwin T. Gatchalian was quoted in a Manila Bulletin report.
Consumers can save around P10 to P12 in the per-liter cost of oil products that they have been from the oil pumps, according to consumer-groups.
Gatchalian noted it is not a plan being eyed by the government for now. He added that under the TRAIN Law, there is a provision where the excise taxes will be automatically removed.
“That is the US$80 per barrel benchmark in the TRAIN Law, but so far we have not breached that yet,” he explained.
Meanwhile, the Department of Energy revived the Oil Contingency Task Force (OCTF) to create plans that can cushion the impact of oil facilities strikes in Saudi Arabia.
The task force will be re-activated “in preparation for natural or man-made disasters to address the country’s immediate oil supply concerns.”
With the re-establishment of the OCTF, it is expected that it could mitigate the impact of the geopolitical and disaster-related events that may cause supply disruptions or sharp volatility in the world oil prices.”
The DOE also added that they’re strictly implementing the minimum inventory requirement which is equivalent to stocks of 30 days for oil refiners, 15 days for bulk marketers, and seven days for LPG players.