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The government is set to remove tariff levied on imported oil to
blunt the effects of soaring world crude prices.
In a certification issued to the Department of
Finance, Energy Secretary Angelo Reyes said the average prices of
Dubai crude and diesel in the international market were above
$103.50 per barrel and $117 per barrel, respectively, from June 1 to
15, 2008.
World crude prices approached $144 a barrel on
Tuesday. (See related front-page story.) And imported gasoline rose
to $140.30 per barrel from $131.13 per barrel, and diesel to $169.36
per barrel from $161.22 per barrel.
In light of soaring prices, the government
ordered that diesel products be levied a zero-percent tariff rate
effective Tuesday.
The tariff cut on diesel, the transport
sector’s fuel of choice, is in line with Executive Order 691,
which calls for the temporary modification of rates each time oil
prices reach certain price levels.
Oil products originally carried a 3-percent
tariff rate prior to the government’s reduction scheme. Every
percentage-point cut from the rate translates to about P11 billion
in foregone revenues for the government.
Despite the continuing tariff cuts imposed by
the government at the expense of much-needed revenues, fuel prices
continue to skyrocket, increasing to more than a third from last
year’s levels. As a result, local oil firms are expected to
continue with incremental pumps price increases in the coming weeks.
Earlier, petroleum companies said the soaring
world prices of oil, as well as the weakening peso against the US
dollar, have resulted in hefty losses that they would have to recoup
from motorists through staggered adjustments at the pumps.
Data from the Department of Energy showed that
as of June 28, prevailing domestic prices of fuel have been
averaging between P58.26 and P60.07 per liter for unleaded gasoline;
P55.10 and P58.30 per liter for kerosene; P51.00 and P52.97 per
liter for diesel; and P600.00 and P671.50 per 11-kilogram liquefied
petroleum gas cylinder.
-- Euan Paulo C. Añonuevo
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