DOE closing in on oil smugglers, says official | Inquirer Business

DOE closing in on oil smugglers, says official

By: - Reporter / @amyremoINQ
/ 07:47 PM September 26, 2011

MANILA, Philippines — The Department of Energy (DOE) said it has been closing in on oil smugglers since it began a more aggressive monitoring of smuggling hotspots in the country.

Energy Undersecretary Jose M. Layug Jr. said the department has “upped the ante” by engaging in more activities that were expected to reduce these illegal acts, which have been costing the government anywhere between P30 billion and P60 billion in foregone revenues from taxes and duties.


Apart from a more stringent monitoring, the DOE is in also in the process of forging new agreements with various government agencies—such as the Department of Finance, Bureau of Internal Revenue and Bureau of Customs, among others—for collaborative efforts aimed at curbing smuggling in these hotspots, Layug explained.

The energy official, however, declined to cite the specific areas they have been monitoring for security purposes.


Local oil players earlier lamented the increasing incidence of fuel smuggling in the country as this has raised the uncertainty for international companies to invest in the Philippines. They said that legitimate oil players have been feeling the pressure from the same illegal players.

Energy Secretary Jose Rene D. Almendras earlier said that oil smuggling has been one of the main reasons why pump prices have become 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 had said.

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 to ensure legitimate importation of fuel products.

Two years ago, Petron chair Ramon S. Ang said that as much as 30 to 35 percent of the gasoline and diesel sold in the market today came from oil smuggling. This was equivalent to some P30-P35 billion in uncollected taxes, he added.

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TAGS: Bureau of Customs, Bureau of Internal Revenue, crime, Department of Energy, Department of Finance, Government, Government Revenues, oil and gas, Smuggling, state budget and taxes
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