Volume of marked tax-paid fuel breaches 9-billion-liter mark

MANILA, Philippines — The volume of tax-paid marked fuel breached the nine-billion-liter mark last week, ensuring collection of correct import duties and excise taxes from oil products at a time when government revenues were weak amid a recession.

Bureau of Customs (BOC) Deputy Commissioner Teddy Sandy S. Raval told the Inquirer that a total of over 9.3 billion liters of oil were injected with chemical markers signifying tax compliance, as mandated under the fuel marking program, between September last year and July 2.

Separate data provided by Finance Secretary Carlos G. Dominguez III last Saturday showed that of the 20 oil firms participating in the program, the biggest volumes of oil marked so far were those of Petron (2.3 billion liters or 24.2 percent of total), Shell (1.9 billion liters or 20.4 percent of total), and Unioil (1.03 billion liters or 11.03 percent of total).

The 17 other companies that regularly participated in fuel marking were Chevron, Era1, Filoil, Goldenshare, High Glory Subic, Insular Oil, Jadelink, Jetti, Marubeni, Micro Dragon, Phoenix, PTT, Seaoil, SL Gas, SL Harbor, Total/Filoil, and Warbucks.
Three-fourths of the marked fuel were in Luzon, 20 percent were in Mindanao, and 5 percent in the Visayas.

The BOC and the Bureau of Internal Revenue (BIR) continued fuel marking even during the COVID-19 lockdown as the program had been exempted from the quarantine restrictions on movement of goods and people.

The BOC marked oil in depots, tank trucks, vessels, warehouses, and fuel-transporting vehicles, while the BIR tested in refineries and their attached depots, gasoline stations, and retail outlets.

The country’s two largest tax-collection agencies have deputization and police authority during field testing so they can not only seize adulterated, diluted or unmarked petroleum, but also arrest unscrupulous traders.

The joint venture of SGS Philippines Inc. and Switzerland-based SICPA SA had been producing and providing the ready-to-use official marker while also conducting actual marking of all taxable oil products.

Fuel marking costs P0.06884 per liter, shouldered by the government in its first year of implementation.

The Department of Finance (DOF) had targeted to collect an additional P20 billion in tax revenues this year through fuel marking.

DOF officials earlier estimated the total volume of fuel needed to be marked at about 15.2 billion liters.

The fuel marking program was aimed at combating oil smuggling and misdeclaration to increase government revenues.

In 2016, foregone revenues from smuggled and misdeclared oil products amounted to P26.9 billion, more than half of the actual P52.6 billion collected by the BOC and the BIR that year.

The Manila-based multilateral lender Asian Development Bank (ADB) had a larger estimate of P37.5 billion in foregone tax revenues annually due to oil smuggling, while a study commissioned by domestic industry players had pegged revenue losses to as much as P43.8 billion yearly.

JE