Oil companies have agreed to comply with the Department of Energy’s (DOE) call to give public utility vehicles (PUVs) with discounts and further assistance to address the adverse impact of higher oil prices.
Energy Secretary Alfonso Cusi met with oil industry stakeholders to devise measures, through discounts and corporate social responsibility programs, that will support the transport sector and even the marginalized.
The agreements made during the meeting will be formalized through a Memorandum of Agreement (MOA) with the DOE.
“We are here to help one another find ways to cushion the effect of the oil situation and ensure the utmost protection of our consumers despite the geopolitical factors abroad that we cannot control affecting the world oil market,” Cusi said.
At present, PUVs are allowed P1 per liter discount under an existing MOA between the DOE and three oil firms, namely Petron Corp., Phoenix Petroleum Philippines Inc., and Pilipinas Shell Petroleum Corp.
The agency is working on a department circular requiring oil companies to provide a weekly notice of the price adjustments (decrease, increase or no adjustment) alongside with the computation of their products’ components based on the elements involved in the international price movement, the biofuels cost, and the capital/operational cost recovery.
In line with the proposed measures, the DOE is also closely coordinating with the Department of Finance (DOF) to discuss new measures concerning the excise tax and value-added tax on oil as a result of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
Starting January 2018, the TRAIN Law imposed higher excise tax on gasoline from P4.35 per liter to P7 per liter; new tax rates were also imposed for diesel (P2.50 per liter), kerosene (P3 per liter), and Auto liquefied petroleum gas or LPG (P2.50 per liter).
The DOE will also be working with the Department of Transportation (DOTr) for the swift implementation of Section 82 of the TRAIN Law on fuel vouchers for PUVs and to expedite the unbundling of fuel prices.
On Tuesday, oil companies on Tuesday raised gasoline prices by P1.60 per liter, diesel prices by P1.15 per liter, and kerosene prices by P1.00 per liter.
The current increase has been attributed to the recent international geopolitical developments, which include US oil sanctions on Iran, the drop in the production levels of Organization of the Petroleum Exporting Countries (OPEC), and the political changes unfolding in Venezuela.
Based on International Energy Agency (IEA) reports and Mean of Platts Singapore (MOPS) trends, oil supply and demand in the short and medium term is expected to reach $80 per barrel.