The Department of Energy (DOE) has reminded oil companies to use up all their oil supplies before applying the new round of the tax increase to fuel products.
The tax hike will be implemented on January 1, 2020 with an increase of P1.50 per liter in tax on fuel, according to a BusinessMirror report.
Kerosene, liquefied petroleum gas, unleaded premium gasoline, lubricating oils will also go up by P1 per liter or kilogram, as stated under the law.
For bunker fuel oil and petroleum coke, another P1.50 per tax per liter or metric ton will be implemented respectively.
DOE Undersecretary Jesus Cristino Posadas instructed oil firms to clear all their remaining stocks before applying the additional taxes next year.
“The normal protocol [is for oil firms] to sell all its old stocks, both imported and produced by the refinery,” Posadas was quoted in a BusinessMirror report.
Applying the tax hike on the remaining balance of the inventory would be a violation of the law, in which criminal penalty of large-scale estafa and administrative penalties such as closure of the establishment will be imposed on violators.
Posadas added that DOE will closely monitor the inventories of oil firms to protect consumers from unjust trading and profiteering.
As stated under the TRAIN law, excise tax on fuel will increase three times. The first round took effect last year with an increase of P2.50 per liter.
The second tranche was on January 1, 2019, which amounted to P2 per liter. Once the third round is implemented, the total price hike in fuel excise tax will be P6 per liter.