Additional fuel excise tax now in effect

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The TRAIN Law will impose higher fuel excise taxes beginning today, but it should not cause oil prices to shoot up immediately. (FILE PHOTO)

Metro Manila (CNN Philippines, January 1) — Filipinos will pay more for fuel at the beginning of 2019 because of an additional excise tax provided by law.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) law, an additional ₱2 per liter excise tax is imposed on diesel and gasoline, ₱1 for every liter of kerosene, and ₱1 for every kilogram of cooking gas or liquified petroleum gas (LPG) beginning January 1, 2019.

Senate economic affairs committee chair Win Gatchalian said the increase in fuel excise taxes would impact pump prices by around ₱2 to ₱3 per liter.

But gas prices should not shoot up immediately. In fact, at least one gas company would roll back pump prices by up to ₱1.90 per liter.

The Department of Energy (DOE) earlier told oil firms to empty their gas inventory from 2018 first before applying the fuel excise taxes. Energy Secretary Alfonso Cusi said those who apply the new tax on old stocks would be violating the law and may face administrative penalties such as closure and "large-scale" estafa.

However, Gatchalian warned that there may be oil firms which would take advantage of the latest round of fuel tax hikes by increasing prices of fuel imported before the implementation of the additional taxes.

The senator said the DOE should closely monitor the inventories of oil firms to avoid them from profiteering off the tax hike by selling old oil stocks at a higher price, even if they bought it cheaper.

The government initially suspended the implementation of the second of three consecutive yearly fuel tax hikes under TRAIN amid rising prices of goods, only to change its stance when oil prices in the world market slumped.

Filipinos would be dealing with even heftier oil taxes when the clock strikes midnight on the first day of 2020, when gasoline would cost ₱11.20 higher per liter, while diesel and kerosene would climb by ₱5.04 and ₱5.60 per liter, respectively. LPG would also cost ₱3.36 higher per kilogram by that time.