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AS the government is set to remove tariff on oil due to high prices
in the world market, the Department of Finance expects more revenue
windfall from value-added tax on petroleum products.
Finance Undersecretary Gil Beltran said excess
revenue from oil is seen to rise further than the earlier estimate
of P18.6 billion after oil continued its record-breaking run on
Thursday to hit $145 a barrel for the first time.
Beltran said the P18.6-billion estimate is under
the assumption that crude price will average $114 per barrel, adding
that with higher revenue from the commodity, the government will
have more fund to support higher spending for social services.
He told reporters, “If we go higher than P18.6
billion, we will make sure we will focus on the poor. We are allowed
to spend on items like these if we exceed our projected revenue. We
have the flexibility.”
The government is set to remove tariff levied on
imported oil to blunt the effects of soaring world crude prices.
Energy Secretary Angelo Reyes said the average prices of Dubai crude
and diesel in the international market were above $103.50 a barrel
and $117 a barrel, respectively, from June 1 to 15, 2008.
As a result, imported gasoline rose to $140.30 a
barrel from $131.13 a barrel, and diesel to $169.36 a barrel from
$161.22 a 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 pump price increases in the coming weeks.
Earlier, petroleum companies said the soaring
world prices of oil together with 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.
-- Chino S. Leyco
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