MANILA, Philippines -- Oil smuggling in the country may have been costing the government as much P60 billion in taxes annually, or about double the industry?s earlier figures of only P30 to P35 billion yearly, according to Energy Secretary Jose Rene D. Almendras.

?(One of the) most pressing problems of the upstream and downstream is really the aspect of oil smuggling. We have been reminded by oil sector players that they expect the government to step up initiatives and address the oil smuggling problem in the country,? Amendras admitted.

Almendras said the Department of Energy (DOE) has been investigating the extent of oil smuggling in the country as reports cited a wide range of P20 billion to P60 billion in tax revenue losses every year.

?As of last Friday, the Department of Finance has already called together an interagency meeting with the DOE and the Department of Justice to attend to forming an interagency team to specifically address oil smuggling problem of the country,? Almendras said.

?We hope to activate this interagency task force within the month so we can start as soon as possible,? he added.

The energy chief stressed that oil smuggling is one of the main reasons why pump prices are higher by as much as P5 a liter in certain areas.

?One of the reasons for that significant (price) difference is the problem of oil smuggling. It has a very significant impact on pump prices? The biggest challenge to the government is the tariff loss and VAT (value added tax) losses that occur because all the smuggled oil does not get captured,? Almendras explained.

To help curb this rampant fuel smuggling, the DOE earlier said it has been planning to maximize the use of marker dyes and determine the source of imported petroleum products.

?For instance, once an adulterated (fuel) product is found, we will also find out the source of the fuel. And since the marker dye system can detect source, it can also be used by the energy department for its anti-smuggling drive,? said Zenaida Y. Monsada, director of the DOE?s Oil Industry Management Bureau.

The marker dye system is currently used to determine whether certain types of imported fuel have been cleared for entry to the Philippines. Further tests will determine the source.

Monsada said that by knowing the source, the government would be able to impose more stringent controls and keep a tighter watch over the fuel imports.

Citing a study, San Miguel Corp. president Ramon S. Ang earlier said that as much as 30 to 35 percent of the gasoline and diesel sold in the market today has been coming from oil smuggling. This was equivalent to some P30-P35 billion in uncollected taxes, he added.

Former Finance Secretary Margarito Teves quoted similar figures, saying the government has been losing some P32 billion in taxes every year due to the rampant oil smuggling.