MANILA – The second round of higher excise taxes on petroleum products officially took effect on Jan. 1, but will be reflected by fuel prices by the middle of this month, the Department of Energy (DOE) said.
Oil companies must first consume their 2018 inventory before applying the second tranche of fuel excise taxes on sales.
The Energy department estimated that the 2018 fuel stocks might last until mid-January, “depending on demand,” Energy Secretary Alfonso Cusi told GMA News Online.
Only then can the new excise tax rates be applied fuel sales.
The estimate is based on DOE’s requirement for oil companies to maintain a minimum inventory to cover 15 days of market demand.
“Excise tax will be applied only to new inventories. Oil companies have to sell their old stocks without the new excise tax,” Cusi emphasized.
The Tax Reform for Acceleration and inclusion (TRAIN) law imposed a P2.50 per liter excise tax on diesel, from zero, and hiked the levy on gasoline to P7.00 per liter on Jan. 1, 2018.
The measure was signed into law by President Rodrigo Duterte in December 2017.
Under the tax reform law, fuel excise taxes will go up by P2.00 per liter starting Jan. 1, 2019. This means that the excise tax on diesel will go up to P4.50 per liter and on gasoline to P9.00.
The DOE earlier reminded oil companies not to impose the second round of fuel excise taxes starting January 2019, particularly on petroleum stocks obtained in 2018.
The Energy department also warned violators face administrative penalties such as closure of the enterprise and criminal penalty of large scale estafa. (GMA News)
