NEW OIL TARIFFS resulting from the effectivity of the Asean Free Trade Agreement in January may bring about “distortions” that will have to be reviewed, various government officials said.

In a hearing at the Tariff Commission Wednesday, Zenaida Monsada, oil industry management bureau director at the Department of Energy, said that when tariffs on crude oil and finished products from the Asean become zero by Jan. 1, 2010, a “negative tariff differential regime” could arise.

“Normally, we have a positive tariff differential between crude and finished products. It just means that finished products are slapped a higher tariff. But with the effectivity of the Afta, we’re seeing a negative tariff differential,” she explained. “We’re proceeding toward a regime of negative tariff differential, where finished products will get lower tariffs than crude.”

Ramon Kabigting, director of the Department of Trade and Industry’s Bureau of International Trade Relations, acknowledged that there would be “distortions” in the tariff structure when the Afta takes effect.

Tariff Commission chair Edgardo Abon said these distortions could have “big revenue implications on the country,” and would have to be thoroughly studied.