|
By Max V. De Leon
, Reporter
First of two parts
FORGET about oil price rollbacks. This, in
effect, is the message the government would be conveying when
President Arroyo signs within the week an executive order raising
the tariff on petroleum products.
The issuance of the EO, which a Manila Times
source said would be announced by Mrs. Arroyo in her State of the
Nation address (SONA) on July 26, will raise the surcharge on
imported crude oil and imported refined petroleum products from the
present 3 percent to about 5 to 7 percent.
The three-percent levy is specified under
Section 6 of the Oil Deregulation Law (Republic Act 8479).
The section explains that beginning January 1,
2004, or upon the implementation of the Uniform Tariff Program under
the World Trade Organization and Asean Free Trade Area commitments,
“the tariff rate shall be automatically adjusted to the
appropriate level notwithstanding the provisions under this
section.”
With the country on the brink of a fiscal
crisis, the government is about to amend the provision as part of
the measures that the administration is putting up to narrow the
widening budget deficit.
The petition filed by the Department of Energy
before the Tariff Commission shows that the government expects to
raise from P4.48 billion to P14.8 billion a year from the 5- to
7-percent increase in the tariff, based on the 2004 projected
importation volume.
Raising the duty, according to industrialist and
oil price watch advocate Raul T. Concepcion, will erase all hopes of
a rollback in the prices of gasoline, diesel, liquefied petroleum
gas (LPG) and kerosene.
Concepcion said with the drop in crude prices in
the world market in May and June, a P1.50 drop in the per liter
price for gasoline, 57 centavos for diesel and 86 centavos for
kerosene should have been forthcoming.
The rollback should provide temporary relief
following the recent fare increase.
Fernando Martinez, spokesman for the new oil
players, confirmed that oil companies would not be able to carry out
price cuts once the EO takes effect. He said the tariff hike could
result in as high as P1.20 a liter increase for gasoline and P1.50
for diesel.
Martinez said oil firms are still trying to
recoup the losses from shouldering the upsurge of prices of
petroleum in the world market last year.
“Once the tariff hike is carried out, I think
there would even be an increase [in oil prices],” Martinez said.
He said a rollback is only possible only when
the drop in prices in the world market is bigger than the effect of
the tariff increase.
But this is farfetched at this time, Martinez
said, since the price of crude in the world market is again rising.
The increase, he said, would likely be passed on
to the consumers in the form of a price hike next month.
Concepcion said he had asked the energy
department to carry out the tariff increase in about three months,
or until such time when the public has seen the administration is
really sincere in its promises to improve the lives of the people
through its 10-point agenda.
However, Concepcion said he believes that
suspending the oil tariff increase would only add to the country’s
woes since it would result in foregone revenues badly needed to help
stave off a fiscal crisis.
“I think it’s a done deal. We just have to
bite the bullet and choose between the lesser evil,” Concepcion
said.
He added he was told by the DOE that should the
President fail to sign the EO before July 26 when Congress opens,
the next window of opportunity will come in November when the House
of Representatives and the Senate adjourn for the holidays.
Under the Tariff and Customs Code, the President
can only introduce changes in the tariff schedule when Congress is
not in session.
The Times source said the draft of the EO
prepared by the Tariff Commission after it conducted a hearing on
Tuesday was approved by the Tariff Related Matters (TRM) technical
committee Thursday.
The draft would be sent to the Cabinet TRM and
the National Economic and Development Authority board for final
approval before it is sent to the President for signing.
The approval of the Cabinet TRM and the NEDA
Board is only a formality once the draft EO is approved by the
technical committee, the source said.
He said the government is bent on implementing
the order even if all those who attended the public hearing and sent
their response to the petition of the DOE opposed the measure.
Martinez himself believes that the EO would be
signed. He is also quick to say that the oil companies will
definitely pass the higher tariff on to the consumers.
“We will just act like collectors for the
government,” Martinez said. He said the government is aiming at
the wrong target when its plan is actually to give oil companies
additional tax burden.
In 2003, Martinez said the 50-company oil
industry earned only P7 billion. This, he said, is only about half
of the earnings of the two biggest telecommunications firms which
took a profit of more than P14 billion each in 2003.
A proposal to impose a tax of up to 20 centavos
for every text message was shot down by Malacañang because of the
resulting public outcry.
The Times source said it is possible the
President would be swayed into dropping the EO if the clamor against
it is strong enough.
If the tariff is raised, what the people,
especially the commuting public, should just do is make the
government commit to use half the money to be collected from the
measure in improving the country’s road networks, Martinez said.
“I think the drivers would not mind the effect
of this if they see improvements in the roads because they would
also benefit from it,” he said.
At this time, the source said, there is no
indication that the funds would be allocated to infrastructure. He
said the prime consideration of the administration is to raise more
funds to cushion the budget deficit, which stood at P77 billion as
of May, or only P2.5 billion short of the half-year target of P79.5
billion.
(Part 2 will tackle the EO as contrary to R.A.
8479 and multilateral trade agreements)
Part 2 |
|
