DOE seeks guidelines on zero tariff oil importation

MANILA, Philippines - The Department of Energy (DOE) has urged the Bureau of Customs (BOC) to release the guidelines for the implementation of Executive Order 850 which reduces the tariff on imported petroleum products to zero percent.

A ranking energy official, who requested anonymity, said the DOE has also requested for a meeting with the BOC to settle concerns about the EO.

The official admitted that there are problems with regard to the “source country.” “We do not know how we should implement this order since there are still questions on the issue of the source country. We might have problems if we will not be able to conform with the agreements with other countries,” the official said.

The meeting, likely to be set within this month, will allow the DOE to gain a clearer picture on the implementation of the order.

According to the official, the issue on whether the impact of the reduction on the tariff, estimated at 70 centavos per liter, will be retroactive is also expected to be resolved in that meeting.

“The EO was supposed to be effective January this year. We do not know if it (price impact on petroleum products) will be retroactive. Will there be some form of refund? If so, will it be done on a one-time basis. This will have a big impact on oil prices,” the official said.

Based on the DOE’s monitoring, there was still no record of import due for this tariff reduction as of last week.

Petroleum prices have been going down for the past weeks. Once the EO is implemented anytime soon, consumers may expect further cuts in petroleum prices in the coming weeks.

EO 850 was signed by President Arroyo last Dec. 23 and took effect on Jan. 1, 2010, lowers the tariff on imported petroleum products from three percent to zero.

Energy Secretary Angelo Reyes earlier said the impact of the EO on domestic pump prices should have been felt in the first week of January.

He said the tariff cut will apply to imported petroleum products which are liquid, and all importations within the ASEAN trade area.

“All six ASEAN countries – Philippines, Indonesia, Malaysia, Thailand, Singapore and Brunei. That is good news,” he said.