Dominguez says fuel marking to bring P5-B in revenue per year

The government expects to earn P5 billion a year from fuel marking which would start implementation at oil firms’ facilities following the release of rules governing it, according to Finance Secretary Carlos G. Dominguez.

Dominguez said the circular for fuel marking had been issued already and the consortium that won the bid to carry it out had projected that 95 percent of all marking sites would be operational by end of 2019.

The consortium would deliver equipment to marking sites in the next few weeks and start full operations soon, Dominguez said.

Joint Circular No. 1-2019 issued by the Department of Finance (DOF), the Bureau of Customs (BOC), and the Bureau of Internal Revenue (BIR) last week ordered fuel marking on diesel, gasoline and kerosene, including those entering free zones, as part of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

The BIR will supervise field tests in refineries, depots, refilling stations and other retail outlets. The BOC will oversee fuel marking in depots, tankers, ships, warehouses and other fuel carriers.

Dominguez said fuel marking, which involved the injection of a biochemical into fuel in traceable amounts, would boost government revenue by at least P5 billion a year starting in 2019.

The circular, he said, was “a product of extensive preparations that started in November 2018.”

Dominguez said all stakeholders had been consulted in the preparation of the circular which he said was a result of “various tests carried out since late last year as well as unique operational procedures of various. import terminals and local production facilities.”

“We have been able to confirm that the physical and chemical properties of marked fuel remained unchanged over time,” he said.

Equipment called fuel analyzers, he said, also went through “repeated tests in their ability to detect whether unmarked fuel has been mixed into the fuel supply.”

He added that fuel marking proponents had also been able to integrate the marking process into “day-to-day operations.”

The guidelines give the BOC and the BIR the power to deputize police during field tests. If diluted or adulterated fuel was detected, the BOC and BIR could seize the product and order the arrest of those selling it.

The consortium that won the bid to carry out fuel marking, a joint venture of SGS Philippines and Switzerland-based SICPA SA—is required to produce an official marker, provide it in ready-to-use form and do the marking nationwide. The consortium won a five-year contract.

The official marker would be inserted into fuel manually or through automated systems.

The guidelines said only trained and authorized specialists would be allowed to mark fuel and the marker shall in no time be in the possession of any unauthorized person, including depot and refinery workers.

Oil company representatives are required to be present during marking to “attest to the veracity” of the process.

Marked fuel cannot be mixed with unmarked fuel products or exported.

In the first year of implementation, the government would bankroll the marking cost, which is just a fraction of a centavo.

In the second to fifth year, payment for marking would be taken from trust receipt created by the TRAIN law. (Editor: Tony Bergonia)