Philippines: Oil Tariff Cut Meaningless Amid Unabated Oil Price Hikes — Bayan

The Arroyo regime’s plan of reducing tariff rates on imported oil by one percent will not protect the public from skyrocketing and exorbitant pump prices, according to the umbrella group Bagong Alyansang Makabayan (Bayan).

Bayan pointed out that at the current pace of unregulated oil price movement and with continuing speculation in the global market, pump prices are expected to post an overall increase of as much as P2 per liter in the first quarter of the year alone, easily negating the expected 20 to 25 centavo reduction in pump prices resulting from the planned one-percent oil tariff reduction.

On the other hand, lifting the 12 percent value added tax (VAT) on petroleum products will immediately bring down gasoline prices by P4-5 per liter and diesel prices by P4 per liter, the group said.

Oil tariffs are taxes imposed by the government on oil companies while the VAT on petroleum products is a form of tax that the people – regardless of income and employment – directly shoulder. Thus, the Arroyo regime’s proposal of reducing tariff rates will only protect the profits of the oil companies with negligible positive impact on pump prices.

Bayan said that the country is facing an oil price crisis and the Arroyo regime is running out of excuses to justify the VAT on oil as well as the oil deregulation policy. Last year alone, the price of an ordinary LPG tank increased by almost P77 and jeepney drivers are spending P147 more on diesel because of oil price hikes. These are the realities confronting the people that feed a worsening social unrest, which token measures such as the oil tariff reduction, nor an Energy Summit that dismisses the people’s urgent and legitimate demands for price control and the repeal of VAT, will not appease.

The umbrella group reiterated that the only truly beneficial measures at this point of unprecedented oil prices are the repeal of the Oil Deregulation Law and the permanent removal of the VAT on oil products.

None of these proposals are included in the Arroyo government’s planned energy summit.

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