Government starts fuel marking in February

MANILA, Philippines — The government is set to launch next month the fuel marking system, which is expected to help plug tax leakages caused by the smuggling of oil into the country, according to the Department of Finance (DOF).

In an interview, Finance Undersecretary Antonette Tionko said the pilot implementation of the fuel marking scheme is expected to commence in early February after the government has finished testing the fuel markers.

The program will run first in Metro Manila before being rolled out nationwide in March.

“Hopefully by next month, first week of February, we will launch it already. We will test first, (then) eventually (implement) nationwide. We will do it first here, the first marking,” Tionko told reporters.

Currently, Tionko said the joint venture of SICPA-SA and SGS Philippines, the winning bidder for the fuel marking program, is already going around oil refineries to assess the fuel marker.

This is done in cooperation with the Department of Energy (DOE) and the Department of Environment and Natural Resources (DENR) to secure the necessary clearances for the use of the fuel marker.

“Right now, they are testing the marker itself, the acceptability of the marker. So that’s in discussion with the DOE, the DENR. Once it’s accepted, we will do our first marking,” Tionko said.

The DOF official expressed confidence that the test would be done quickly, as the marker does not affect the composition of fuel.

“It should be fast. I don’t see any problem because it’s not an additive. It doesn’t have an effect on the fuel,” she said.

Finance Undersecretary Karl Kendrick Chua, meanwhile, assured that the cost of the fuel marker would not yet be passed on to importers and manufacturers in the first year of implementation, as the government has allotted P2 billion for the program.

“The first year, it’s subsidized. There’s a P2 billion allocation. In the succeeding years, it will be passed on to the industry and they may pass it on to the consumers,” Chua said.

The markers cost P0.06 centavos per liter of fuel.

Fuel marking will be required on all petroleum products that are refined, manufactured, or imported into the Philippines that are subject to the payment of duties and taxes – such as, but not limited to gasoline, denatured alcohol used for motive power, kerosene, and diesel fuel oil – after the taxes and duties have been paid.

The system will also monitor all locally-refined finished oil products to ensure correct payment of corresponding excise taxes and value-added tax.

Earlier, the Department of Finance said fuel marking is expected to plug as much as P44 billion in revenues lost annually due to oil smuggling.