Oil prices up this week — but not because of TRAIN 2

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Oil firms will increase their oil prices due to a movement in prices in the world market.

This comes before the second tranche of excise tax on oil under the Tax Reform Acceleration and Inclusion (TRAIN) Law has been implemented completely.

Effective January 8, gasoline prices will increase by P0.80 per liter, while diesel increased by P0.70 per liter, and kerosene by P0.40 per liter.

The increase occurred after eleven consecutive weeks of reduction for diesel and kerosene prices, while it occurred after three successive weeks for gasoline.

Caltex Philippines told reporters yesterday its price adjustments will take effect at 12:01 am.

Petro Gazz, Phoenix Petroleum Philippines Inc., Pilipinas Shell Petroleum Corp., PTT Philippines Corp., Seaoil Philippines Inc., Total Philippines Corp, Petron Corp, Eastern Petroleum, and UniOil Petroleum Philippines Inc. said their respective price adjustments will be effective at 6:00 am.

“These reflect the changes in the prices of petroleum products in the world market and does not yet include the additional taxes under the TRAIN Law,” Phoenix said in its advisory.

Flying V has not yet announced the schedule of their price adjustments as of this writing, but according to the Department of Energy, at least 32 gas stations including 6 in Metro Manila are already implementing the additional excise tax on fuel.

According to Department of Energy (DOE) undersecretary Felix William Fuentebella, the uptrend movement in the global market was triggered by the recent  talks between Saudi Arabia and Organisation of the Petroleum Exporting Countries (OPEC) on possible decrease in production.

“They are basically talking about a production cut, coupled by the actual cut of production by Saudi Arabia,” he said.

The DOE reminded oil players to properly implement the second tranche of excise tax on fuel under the TRAIN law.

The energy department assured the consumers that they did efforts to prevent abuse of the implementation of the new excise tax rates.

300 gas stations have implemented the second tranche of excise tax on oil out of 8,630 retail stations nationwide, Fuentebella said.

“Not all gas stations will adjust at the same time,” Fuentebella said. “We expect bulk of the oil companies to implement the second tranche of excise tax on fuel towards the middle of the month to February.”

An additional excise tax of P2 per liter will be implemented on diesel and gasoline, and P1.00 per kilogram on household LPG, as stated under the second round of TRAIN Law’s implementation.

There will also be an additional 12 percent value added tax, which totals to P2.24 for both diesel and gasoline, and P1.12 for LPG.

The DOE emphasized that the increase in pump prices of petroleum products from the implementation of second tranche of fuel excise tax will be smaller due to offsetting effect of the rollbacks in 2018 and January 2019.

DOE Secretary Alfonso Cusi expects that crude oil prices will not be hitting record high rates.

“If the trend continues, we do not expect it to have as much impact on fuel prices as it did last year. Besides, we can cushion the effect of any new oil price increases by becoming more efficient in our use of energy,” he said.

 

Meanne Rosales is a reporter and segment producer at Power Philippines. For content concerns, story pitches, or partnerships and collaborations, you may contact her through meanne@powerphilippines.com.

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