Big oil firms lead in fuel marking amid smuggling woes

Efforts to properly tax petroleum products have gained momentum as the country’s biggest oil firms get on board, with Chevron Philippines Inc. claiming to be the first among them to comply with the government’s fuel marking program.

With the implementing rules and regulations for the program already finalized, stocks of gasoline, diesel and kerosene—at refineries, terminals or retail sites—shall be tested for compliance.

The program is intended to deter the smuggling of petroleum products by placing a molecular marker in the refined fuels.

Based on the Department of Finance’s estimates, oil smuggling and misdeclaration of shipments cost the government at least P40 billion in annual revenue losses.

Chevron, which sells fuels through the Caltex brand, on Wednesday said fuel marking was done at its import terminal in San Pascual, Batangas, on Nov. 11.

The company said this was witnessed by officials from the Bureau of Customs and representatives from the fuel marker consortium, SICPA SA-SGS Philippines.

“We hope that this program will level the playing field among the industry participants and ensure that all oil companies pay the correct taxes and help build the nation,” Chevron country chair Louie Zhang said in a statement.

Earlier this week, Pilipinas Shell Petroleum Corp. said it was ready to start automated fuel marking this month at its 90-million liter North Mindanao Import Facility in Cagayan de Oro City, which supplied the markets in Visayas and Mindanao.

Pilipinas Shell also said it was working with the SICPA-SGS consortium to install and commission an automated fuel marking injection system at its Tabangao refinery in Batangas City.

“We are working double-time to start automated fuel marking at our manufacturing facility by February 2020,” Pilipinas Shell vice president Serge Bernal said.

Last month, Petron Corp. president and chief executive Ramon Ang said they looked forward to the program’s implementation, but reiterated that fuel marking would work only if all players went by the same rules.