Lawmakers warn of oil price shocks
Credit to Author: Divina Nova Joy Dela Cruz| Date: Tue, 31 Dec 2019 17:05:00 +0000
Lawmakers warned consumers of impending “price shocks” at the start of 2020 with the implementation of the third tranche of the Tax Reform for Acceleration and Inclusion (Train) Law that increases the excise tax of oil.
Finance Assistant Secretary Tony Lambino confirmed that the third and final tranche of the excise tax increase on petroleum products takes effect on Jan. 1, 2020.
Republic Act 10963 or the “Train Law,” which was passed in 2017, set three tranches of tax rate hikes from Jan. 1, 2018 to Jan. 1, 2020. Under the law, taxes for diesel will increase by P1.50 per liter; gasoline, kerosene, liquefied petroleum gas, and lubricating oils will go up by P1; and bunker fuel and petroleum could increase by P1.50.
Bayan Muna party-list representatives told consumers to brace for price shocks.
“Even if the Department of Energy is telling oil companies to first deplete their old stocks before imposing the added excise tax on oil products, without the unbundling of the prices of oil products we cannot tell for certain if the oil companies are already passing on the new excise taxes,” House Deputy Minority leader and Bayan Muna Rep. Carlos Isagani Zarate said.
“Aside from unbundling oil prices for consumers to see the true prices of oil, we maintain that it is still best to repeal the Train law so as to protect consumers from the upcoming price shocks like in 2018 when it was first implemented,” the Davao-based lawmaker added.
Bayan Muna Rep. Ferdinand Gaite also sought the repeal of the Train Law because “it only brought a continuous rise in prices of basic goods.”
“The supposed lower inflation in 2019 being peddled by economic managers would be wiped out with the new price increases as well as higher demand for oil in the international market,” Gaite said.
“Again if the administration wants to shield consumers from the upcoming price onslaught then it should immediately repeal the Train Law,” he added.