MANILA – Heeding the advice of his cabinet members, President Rodrigo Duterte has gave a green light for the imposition of the second round of increases in the excise taxes of petroleum products next year.
Presidential spokesperson Salvador Panelo said in a statement that Duterte has approved the fuel tax hike during the Cabinet meeting in Malacañang on Tuesday night.
“The President has approved the recommendation of the Development Budget Coordination Committee to proceed with the implementation of the second tranche of excise tax on fuel, effective January 2019,” Panelo said.
“Due consideration was given to several factors including, but not limited to: the downward impact on inflation owing to the steep drop in the Dubai crude oil price, the disruption in the (Build, Build, Build) infrastructure program, and reduction in budgets including personal services of national government agencies should excise tax on fuel be suspended,” Panelo said.
Under the TRAIN law, the oil excise tax hike may be suspended if oil prices in the world market average $80 per barrel or higher for three consecutive months, but with the current price of $53 to $52 per barrel, the suspension cannot be implemented.
An additional levy of P2.24 per liter should be imposed for diesel and gasoline starting January 1. The additional duty consists of P2 excise tax and 24 centavos value-added tax.
Department of Budget and Management secretary Benjamin Diokno, for his part, said that the proposal was approved following the sharp turnaround in world crude oil prices from a peak of $80 per barrel to $68 per barrel on Nov. 29, with Dubai Futures prices projecting further decline below $60 per barrel in 2019.
“At its peak, diesel price was P48.80 per liter, it will be P37.76 [per liter] in January 2019, inclusive of the P2 excise tax. For gasoline (95 octane) it was P60.90 at its peak, it will be 50.82 in January 2019, inclusive of the P2 additional excise tax,” Diokno said.
The government has earlier considered delaying a fresh increase in excise taxes, citing high global fuel prices but the economic managers said last week that there is no longer any need for a suspension./PN
