MANILA, Philippines — Another round of fuel price hikes took effect yesterday – the ninth consecutive week of increase for gasoline prices and the seventh for diesel.
Oil companies yesterday raised gasoline prices by P1 per liter, diesel by P1.45 and kerosene by P1.35 per liter.
The substantial increases came in the wake of Brent crude’s price hitting a four-year high last week.
Flying V, Pilipinas Shell Petroleum Corp., PTT Philippines Corp., Seaoil Philippines Inc. and Total Philippines Corp. implemented their respective price adjustments at 6 a.m.
Caltex, Eastern Petroleum, Petron Corp., Phoenix Petroleum Philippines Inc. and UniOil Petroleum Philippines Inc. have yet to announce their price adjustments.
The country’s dependence on oil importation explained the steady rise in local pump prices, Petroleum Players Association of the Philippines president Fernando Martinez said.
“We’re entirely dependent on world oil price as we import 99.99 percent of oil requirements,” he said.
Brent crude reached its highest price since late 2014 at $86.74 on Wednesday, Reuters reported.
Moreover, peso weakness was pushing fuel prices further, Martinez said.
“Of course, deterioration of peso-dollar contributed .18 per liter for every peso drop while VAT will be added,” he said. “The higher the price, the higher the VAT since it’s 12 percent regardless of the base prices. Added is the excise tax on diesel, which used to be exempted.”
The peso fell to a fresh 13-year low last Thursday, closing at P54.32 against the dollar.
Earlier, Energy Secretary Alfonso Cusi said his agency is exhausting all options to mitigate rising fuel prices and called for the practice of fuel efficiency measures.
“We’ve been exploring higher and expanded fuel discounts to public utility vehicles, looking at nearby countries for lower priced supply and even went to unpopular options to ensure that consumers are protected from the impact of this global price situation,” he said.
Vice President Leni Robredo, for her part, is reiterating her appeal to the government to suspend excise tax on fuel as the country’s inflation rate hit a record-high 6.7 percent last month.
“One thing we are asking this government since last month is to suspend the implementation of the second tranche of excise tax on petroleum products because the next increase has been set already as provided under the TRAIN law,” Robredo said, referring to Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law.
Excise tax worsens problem
Like her allies in the Senate, the Vice President also believes inflation is fuelled in part by the excise taxes on petroleum products under the TRAIN law.
The law, which was implemented in January this year, added P2.65 excise tax per liter to the pump price of gasoline plus P0.32 per liter as value-added tax (VAT) for a total of P2.97 per liter.
For diesel, P2.50 was added as excise tax per liter plus P0.30 as VAT for a total of P2.80 per liter. Diesel used to be free of VAT and excise tax.
TRAIN also imposed excise and VAT on aviation fuel, kerosene, fuel oil, liquefied petroleum gas and auto LPG.
The second tranche of excise tax under TRAIN is set to add P2.24 per liter to the price of gasoline and P2.24 per liter for diesel as excise and value-added taxes.
The law provides that the excise tax on fuel can be suspended should prices of Dubai crude reach $80 per barrel. – With Helen Flores, Romina Cabrera