Sorsogon Governor Chiz Escudero today urged the government to consider suspending or lowering the excise tax rates on gasoline and other petroleum products to ease the burden of motorists and other consumers amid the series of oil price hikes in recent weeks.
In a statement he posted on his Twitter @saychiz, the veteran legislator stressed the government should not take advantage of the current situation and make huge profits as the nation reels from the effects of the COVID-19 pandemic.
“Government should not earn a windfall from high petroleum taxes that unduly burden our people. It can/should suspend/lower excise tax rates on petroleum products while prices are high and simply restore it when it goes down again,” Escudero tweeted.
The former senator issued his statement in support of various consumer group’s call for the suspension of the excise tax as the Department of Energy (DOE) admitted earlier this week that lingering price hike in oil and other petroleum products may persist up until the end of the year or in the first quarter of 2022 due to limited supply.
The high demand for crude oil, the DOE said, was prompted by the opening of economic activities worldwide at a time when western countries are also stockpiling LPGs for the winter months.
“There’s a lack of supply for crude oil. At the same time, some countries are experiencing winter from October to March, so they are stockpiling LPGs,” DOE-Oil Industry Management Bureau Director Rino Abad said during an online briefing last October 12.
Escudero, however, reiterated that the government may still lower the tax rates if it cannot totally suspend the collection of excise taxes to prevent price increases of basic commodities as a result of high petroleum prices.
“The government should effectively manage the situation to prevent giving unnecessary burden to the already weary public. Mahirap na ang buhay nitong panahon ng pandemya. Huwag na sanang madagdagan pa ang bigat na nararanasan ng ating mga kababayan,” Escudero said.
Under the Tax Reform for Acceleration and Inclusion (TRAIN) law or Republic Act 10963, the government may suspend the scheduled increase prescribed by the law when the average Dubai crude oil based on Mean of Platts Singapore reaches at least $80 per barrel.
While the average price of crude per barrel in August was $69.485 as quoted by price reporting agency S&P Global Platts and is $10 shy of what is mandated by the TRAIN Law, the government may still do away with excise tax collection in line with recently-signed Presidential Proclamation 1218, which extended the period of a state of calamity throughout the country due to COVID-19 health crisis.
PP 1218 allows the national government to monitor and control prices of necessities and prime commodities.
The consumer group Laban Konsyumer has said suspending excise taxes of P10 for gasoline, P6 for diesel and kerosene, and P3 for liquefied petroleum gas is a “big assistance to mitigate unavoidable pass on costs of goods and services to all sectors.”