New oil tariff formula up
Lawrence Agcaoili
Manila Standard
The Department of Finance has set the price threshold that will reduce tariff on imported oil products to cushion the impact of rising crude prices on Filipino oil consumers.
Finance Secretary Margarito Teves said in a press conference that the trigger price would be based on an exchange rate of P44 to $1 to ensure that no revenues would be lost despite the tariff reduction.
“The effect will be revenue neutral,” Teves said.
He said the tariff on imported crude oil would be trimmed from 3 percent to 2 percent if the price of Dubai crude averaged $91.92 per barrel in one month and diesel prices based on Mean of Platts Singapore hovered at $94.1 per barrel.
He said the import levy would further be reduced to 1 percent if the average price of Dubai crude averaged $104.83 billion per barrel in one month.
The finance chief said the price of Dubai crude averaged $76.83 per barrel from Oct. 1 to Oct. 29.
He added that the threshold would be finalized with the Department of Energy headed by Secretary Angelo Reyes to ensure that the scheme was revenue neutral.
Teves said President Gloria Macapagal Arroyo would have to issue a new executive order to put in place the tariff reduction scheme aimed at cushioning the impact of rising oil prices on Filipino consumers.
Finance Undersecretary Gil Beltran earlier said the proposed tariff reduction scheme would be revenue neutral as the estimated losses due to the lower import duties on oil products could be offset by higher revenues of the Bureau of Customs and the Bureau of Internal Revenue.
Beltran said “every $1 increase per barrel in the prices of oil products translates to a P1-billion increase in revenues for both the BOC and the BIR.”
The inter-agency Development Budget Coordination Committee has set an oil price target of $61 to $64 per barrel this year.
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