DOE: 2nd round of fuel tax hikes don’t cover 2018 stocks

Mara Cepeda
DOE chief Alfonso Cusi warns oil industry players that applying the 2019 tax rates on 2018 oil stocks may lead to company closure and even estafa charges

THE TRAIN EFFECT. Expect fuel prices to go up by January 1, 2019 due to the Train Law. File photo by Rappler

MANILA, Philippines – Energy Secretary Alfonso Cusi reminded the oil industry that the second round of diesel and gasoline excise tax hikes should not apply to petroleum stocks from 2018.

The Cabinet official said on Friday, December 28, that companies must first empty their 2018 oil inventories before applying the second tranche of additional excise taxes imposed on fuel under the Tax Reform for Acceleration and Inclusion (Train) Law on January 1, 2019.

“The sale of old stocks, referring to the remaining balance of the inventory ending 31 December 2018, which was not covered by the second tranche of excise taxes, should not be collected from the consumers,” said Cusi.

“Otherwise, it would be a violation of the law – not only administrative penalties like closure of the establishment will be imposed, but also the criminal penalty of large scale estafa,” he added.

Under Train, the excise taxes on diesel and gasoline will be increased by P2 per liter effective January 1, 2019. It will also be hiked by another P1.50 per liter in 2020. 

“We have to ensure the proper implementation of the second tranche of Train, because the new collection will be used to support our ‘Build Build Build’ programs, free tuition fee, and medical assistance for our kababayans (countrymen),” said Cusi.  

He said the DOE is “stringently looking” at the 2018 oil inventories to protect consumers from unjust trading and profiteering once the 2019 tax hikes are in place.  

Lawmakers have previously recommended the suspension of the tax hikes in 2019.

The country’s economic managers initially decided to follow the legislators’ suggestion but later changed their minds in November, and once again recommended the implementation of the second batch of fuel excise taxes under TRAIN, which Duterte approved. – Rappler.com

Mara Cepeda

Mara Cepeda specializes in stories about politics and local governance. She covers the Office of the Vice President, the Senate, and the Philippine opposition. She is a 2021 fellow of the Asia Journalism Fellowship and the Reham al-Farra Memorial Journalism Fellowship of the UN. Got tips? Email her at mara.cepeda@rappler.com or tweet @maracepeda.