Two senators remind government of safeguard against high oil prices

AFTER the international price of crude oil surged to $80 per barrel, Senator Bam Aquino yesterday insisted on the suspension of the excise tax on petroleum products should crude price stays steady or goes up for three consecutive months.

“Kung pumatak o humigit sa $80 kada bariles ang global prices ng krudo sa susunod na tatlong buwan, nasa batas na dapat suspindihin ang pagtaas ng buwis sa Enero 2019,” Aquino stressed.

Aquino said that under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, an additional P2 excise tax will be imposed on petroleum products in January 2019.

But under the same law, a safeguard to control fuel prices should take into effect: the excise tax on fuel is to be suspended once the average Dubai crude oil price based on MOPS for 3 months prior to the scheduled increase reaches or exceeds $80 per barrel.

The price of Dubai crude oil increased to $80.8 per barrel yesterday (October 2).

Senator Sherwin Gatchalian agreed with Aquino in calling for the suspension of the second round of excise tax for petroleum. But the senator from Valenzuela also called on the government to be prepared for the effects of higher prices of crude oil.

“Government should also stay a step ahead so as not to be caught napping, like what happened when August inflation figures were higher than predicted,” Gatchalian said.

He said that the government economic managers should simulate inflation scenarios should the Brent oil remain at $80.

“We should also be ready to suspend the second round of the TRAIN Law in 2018 should the Brent price remain at $80,” he added.

With concerns, Gatchalian asked the government to fully implement the Pantawid Pasada program as soon as possible. He also suggested the possibility of increasing the P5,000 subsidy to P6,500.