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Sell old inventory at old prices, oil firms told

/ 05:34 AM December 29, 2018

The Department of Energy (DOE) yesterday reminded oil firms that 2018 inventories should be sold without applying the second tranche of excise under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which will be in effect starting Jan. 1.

The TRAIN law added P2.97 in taxes (P2.65 a liter in excise plus 32 centavos in value-added tax) to gasoline prices at the start of 2018.

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Also, P2.80 a liter (P2.50 in excise plus 30 centavos for VAT) was introduced for diesel.

For the second tranche, the TRAIN law imposes an additional P2.24 a liter for both diesel and gasoline—P2 in excise plus 24 centavos for VAT.

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“We are ready to implement the second tranche of TRAIN, which imposes additional excise taxes to various commodities like petroleum products by the start of the new year,” Energy Secretary Alfonso Cusi said in a statement.

Cusi urged retailers “to first empty their 2018 oil inventories before passing on additional taxes to consumers. This echoes DOE statements related to the first tranche of taxes imposed in January.

Otherwise, retailers would be violating the law, which means they could face administrative penalties like closure of the establishment and criminal penalty for large-scale estafa.

Cusi said the DOE, in coordination with the Department of Finance, Bureau of Customs and Bureau of Internal Revenue, has devised a mechanism to closely monitor existing oil inventories.

“We have to ensure the proper implementation of the second tranche of TRAIN because the new collection will be used to support our ‘Build Build Build’ programs, free tuition fee and medical assistance for our kababayans,” he said.

“With the imposition of the additional excise taxes, we are stringently looking at the 2018 inventories of oil companies in order to protect consumers from unjust trading and profiteering once the second tranche is operationalized,” he added.

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TAGS: gasoline prices, petroleum products, TRAIN Law
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