With the cost of fuel at an all-time high, motorists are forced to gas up their vehicles at ridiculous prices. According to the fuel monitoring system of the Department of Energy (DOE), the price of gasoline in Metro Manila has an average low of P58.55 and an average high of P70.52
There was a price rollback that happened earlier this week (PHP 1.00 reduction in gasoline, PHP 0.60 drop for diesel), but that not may be enough to ease the woes of motorists. They did endure 10 straight weeks of price hikes, after all.
However, there could be a temporary solution that could see a significant drop in fuel prices. Senator Grace Poe recently filed Senate Bill No. 2445. It seeks to suspend the collection of excise tax on gasoline and diesel products should the average price of Dubai crude oil hits $80 per barrel for three consecutive months.
Poe's bill seeks to amend section 148 of the National Internal Revenue Code by allowing the temporary suspension of excise taxes on both gasoline and diesel fuels.
But just how much cheaper will the prices of gasoline and diesel become? Under the current Tax Reform for Acceleration and Inclusion Act (aka the TRAIN Act), the excise tax on regular and premium gasoline is set at PHP 10.00 per liter. Meanwhile, the excise tax on diesel is currently set at PHP 6.00 per liter.
Should Senate Bill No. 2445 be approved, gasoline could become more affordable by PHP 10.00 per liter and diesel by PHP 6.00 per liter. However, the 12% value-added tax will remain imposed on the sale of both gasoline and diesel fuel products.
“The rising cost of fuel is certain to have a spillover effect on the cost of other products, especially food which accounts for a big chunk of a household's expenses. Such will aggravate poverty and hunger among our people. If the government cannot substantially provide for its people, then at the very least, it must do all it can to ease their burden,” said Senator Poe.
With the price of oil still over USD 81 per barrel (or about PHP 4,063), we're not out of the woods just yet. Should Senate Bill No. 2445 be approved, however, it will give motorists some relief the next time they gas up.
However, the government stands to lose billions of Pesos should the excise tax on fuel be suspended. According to the Department of Finance (DOF), an estimated PHP 131 billion could be lost from the suspension of excise tax in both gasoline and diesel.
Should the government bite the bullet and temporarily suspend the collection of excise tax on fuel? Below is Senate Bill No. 2445 for your perusal.