Gov't: No fuel price hike soon due to new tax reform law

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Metro Manila (CNN Philippines, January 1) — The Department of Finance (DOF) clarified there will be no immediate increase in gas prices with the implementation of the tax reform law.

"The increase is not expected to take effect immediately on January 1 as it takes a few days for the 2017 oil stock to be used up," the DOF said in Twitter post Sunday.

This is because excise tax is imposed at the port of importation or refinery, the DOF said.

It said motorists should remain vigilant against oil companies who hike gas prices.

"Oil increase done by companies on January 1 might be considered profiteering," the DOF added.

The Department of Energy (DOE) also issued an advisory to the oil industry, saying: "Please ensure and advise your dealers that pump prices should only reflect stocks that have actually had the new excise tax rates imposed. Old stocks should be sold on the old excise rate or at zero-rated excise tax for diesel product."

The tax reform law signed by President Rodrigo Duterte on December 19 imposes higher fuel prices starting January 1, 2018.

Regular and premium unleaded gas will go up by ₱7 per liter this year, ₱9 in 2019, and ₱10 in 2021. While diesel and fuel for public transportation will increase by ₱2.50 per liter in 2018, ₱4.50 the following year, and ₱6 in 2020. For liquefied petroleum gas, prices will rise by one peso annually from 2018 to 2020.

Kabayan Party-list Representative and Assistant Majority Leader Ron Salo on Sunday said it should take weeks for the impact of the higher taxes to be reflected at the pump.

Salo, a member of the House Committee on Economic Affairs, asked Energy Secretary Alfonso Cusi to "take preemptive action to head off any attempt" by any oil firm in the country to raise fuel prices using fuel stocks imported before January 1, 2018.