Duterte to raise tax on oil products by 10%; gas price up, diesel down

MANILA: President Rodrigo Duterte has signed Executive Order (EO) 113 in order to source additional funds for the government's social amelioration program (SAP) which aims to feed some 18 million families affected by the COVID-19 pandemic.

Under the new EO, on top of the MFN (Most-Favored-Nation) and preferential import duties, an additional import duty of 10% will be added to crude oil and all of its refined products including petrol, diesel, natural gas, propane, butane, ethylene, kerosene, aviation fuel, grease, lubricants, and other reformates and other petroleum spirits.

Proclamation No. 929 declares the country under a State of Calamity for at least six months and Republic Act No. 11469 or the “Bayanihan To Heal as One Act,” which puts the Philippines in a State of National Emergency, grants the President temporary emergency powers to “take such measures as may be reasonable and necessary to enable him to carry out the declared national policy under the said law.”

Currently, the Department of Social Welfare and Development has released over P62.8 million to more than 11 million families already. This accounts for about 65% of the 18 million SAP target beneficiaries. The government still needs an extra P1.5 trillion to provide for the rest of the families who signed up for the SAP and to fund other anti-COVID-19 programs.

Proceeds of the temporary additional import duty will be handled by the Department of Budget and Management in order to ensure that it goes to the social amelioration program or similar forms of assistance, and to any and all needs that arise from the measures versus COVID-19.

The modified rate will revert to zero only when international oil prices increase based on trigger prices indexed to oil prices in the world market, and after certification by the Department of Energy, and a notification sent to the Department of Finance (DOF).

Implementing agencies of the EO are the DOF, Department of Trade and Industry, National Economic Development Authority, and the Bureau of Customs.

The EO, which was signed May 2, 2020, will take effect immediately after publication in the Official Gazette or a newspaper of general circulation.

In related news, Caltex, Petro Gazz, Phoenix, PTT Philippines, Seaoil, and Shell will all raise gasoline price by P0.75 per liter while reducing price of diesel by P0.10 per liter. This reflects movement of oil prices in the world market and does not yet take into account EO 113. New prices took effect 12:01 AM Tuesday morning.

Photos from Wikimedia Commons and the Official Gazette of the Republic of the Philippines

Also read: Fuel prices down anew