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By Chino S. Leyco Reporter
THE Department of Finance said it
may likely cut the tariff on petroleum products to a percent next
month based on the new trigger prices released Monday.
Finance Secretary Margarito B.
Teves said the reduction in the tariff on oil could be implemented
by February, adding the reduction in the pump price of diesel could
amount to at least P0.50 centavos per liter.
“We estimate that, in general,
every 1-percent point reduction in the tariff on oil would allow a
reduction in the pump price of oil across the board by P0.23
centavos per liter,” Teves told reporters.
The finance chief said the
original trigger price of $81 a barrel has been revised to $83.37,
and the 2-percent tariff may be reduced to 1 percent if crude oil
prices averaged $92.41 a barrel.
Zero tariff on oil will be
implemented if the commodity averages $103.25 a barrel, he said.
For diesel, the duty will be cut
to 2 percent if the price reaches $105 a barrel, to 1 percent at
$110, and to zero at $115.70 a barrel.
“Similar to the previous
initial trigger prices, the new prices will still provide basis for
the lowering of the tariff to 1 from 3 percent if the latest average
prices of crude and diesel were [to] hold for the first 15 days of
the month,” Teves said.
Based on the average price from
January 2 to 10 this year, crude per barrel stood at $92.75.
Teves said that a technical group
composed of the finance, energy, and trade and industry departments,
as well as the Bureau of Customs, and the National Economic and
Development Authority would draw up the implementing rules once
Malacañang signs the executive order directing the cut in oil
tariffs. The rules will be subject to consultations with industry
players and other stakeholders.
Teves assured the new threshold
ensures that there will be no revenue losses for the government when
it cuts tariffs as a cushion to high world oil prices.
The scheme would be
revenue-neutral, as the duty is computed on the import value of the
item. The government, however, would maintain the 12-percent sales
tax on petroleum products.
Teves said government estimates
show that revenue foregone if the 12- percent value-added tax (VAT)
on imported petroleum products were suspended would amount to
roughly P54 billion, or P14 billion higher than last year’s
account.
Legislator have been pushing for
the suspension of the VAT on oil products, but the International
Monetary Fund said this would be counterproductive, as such an
action would hurt the poor.
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