MANILA – Oil companies are spending PHP15 billion more to import the same volume of petroleum products amid the increasing oil prices in the global market, Independent Philippine Petroleum Companies Association (IPPCA) chair Fernando Martinez said.
In a Senate Energy Committee hearing Monday, Martinez reiterated the industry’s call to the government to suspend the excise tax on petroleum products to cushion the impacts of soaring oil prices.
The industry opposed the proposal of raising the monthly inventory requirement of petroleum products from 15 days to 30 days.
“This is not realistic physically because not all fuel depot locations have enough physical tank storage capacity nor available land for expansion to support this,” Martinez said.
He added small industry players could not also afford to further increase the monthly stock requirement amid the higher capital needed to import oil products.
“This policy will double the working capital requirement and will be added to the local cost of fuel,” the IPPCA head said.
Martinez said the government could afford to suspend the excise tax on petroleum products amid the higher fuel cost as value-added tax (VAT) collection of the government for the commodity also increases.
“Even (if) you suspend the specific tax of PHP6, with the next round of oil price hike, you will immediately offset it,” he said.
In the same hearing, Department of Finance (DOF) Undersecretary Valery Joy Brion said the government has excess oil excise tax collection of PHP3 billion from January to February this year on the back of the rising fuel prices. (PNA)
