The Bureau of Customs (BOC) in Batangas has asked Pilipinas Shell Petroleum Corp. to settle about P1.6 billion in tax liability to the government that allegedly accrued from the company’s misdeclaration of petroleum products imported since last year.
Port of Batangas collector Juan Tan called the attention of Customs Commissioner Angelito Alvarez to the recommendation of a group of BOC examiners who found that Shell had been deliberately skipping payment of duties for gasoline products shipped through the port from June 2010 until last month.
“(T)his office concurs with the recommendations therein contained,” Tan said in his June 16 letter, a copy of which was obtained by the Inquirer on Thursday.
The BOC assessors—Ernesto Urbano, Leonardo Peralta, Alexander Atienza, Andresito Abayon, Apolinario Gonzales and Ernan Abario—claimed that the multinational oil firm had been passing off its imported oil products as alkylate, a chemical used as blending component for gasoline.
Under the guidelines of the Department of Finance, blending ingredients for petroleum products such as alkylate are exempted from excise tax and value-added tax.
The assessors said that they started to suspect an anomaly after noting that the oil company had been bringing in alkylate in large volumes.
Since June last year, Shell had been importing an average of nearly 17 million liters of alkylate a month, the customs officials said.
“Blending components are imported in very small volume and only in drums as they are merely used to change the color or to increase the octane rating of gasoline,” they said in their report to Tan.
To find out if the imported chemical was really alkylate, the BOC personnel collected samples from Shell’s oil tankers and depot in Tabangao, Batangas City.
After conducting three “international methods” of determining gasoline products, the BOC declared that “the shipments of Shell… are already gasoline and imported in bulk or in full vessel’s capacity.”