Unless you’re living under a rock for the past few weeks, we’re sure you’re aware that 2018 comes with a new law regarding Philippines taxation or the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The TRAIN Act sure looks good for those who earn below P250,000 annually as they will be exempted from income tax starting this year. However, there are other commodities affected by the new law. Among those are fuel prices.
In a report by CNN Philippines, fuel prices—both gasoline and diesel—are expected to increase by around P3.00 after January 15, 2018. See chart below:
Why January 15, you ask? In a directive released by the Department of Energy (DOE), oil companies were required to submit a duly notarized inventory report of their fuel products as of December 31, 2017.
With that, the oil companies aren’t allowed to implement the reformed excise tax until the inventory they submitted have been depleted, with a minimum 15-day inventory requirement – in accordance with the DOE Department Circular 2011-03-0002. This means, they are required to have at least 15 days worth of fuel stored in their depots.
Moreover, oil companies are also required to submit a daily summary of withdrawal starting January 1, 2018. In other words, they should let DOE know how much fuel has been taken from their depots on a daily basis.
So basically, new prices that reflect the revamped excise tax should only be seen after January 15, and that’s if the oil company’s fuel depot (as reflected in their submitted inventory) has already been depleted.
If you’ve noticed fuel price hikes before January 15, that’s not the excise tax kicking in just yet. Take note that the price of fuel in the world market also affects the local retail price, so there’s that.
Fuel retailers are also compelled to inform the public that they are to increase their prices due to TRAIN, and it should be seen through a 1 meter x 1 meter signage in their stations.
Source: Department of Energy via CNN Philippines