Think tank urges Rody to suspend taxes on petroleum products

October 22, 2021 JUST IN

BAGUIO CITY (October 22, 2021) — A public policy thinktank is calling on President Rodrigo Duterte to suspend taxes on petroleum products until the price of petroleum stabilizes in the international market.

“The President in several instances has never shied away from undertaking executive action for the public interest, such as when he ordered the free distribution of farmlands to marginalized farmers, and the free distribution of socialized housing units to various marginalized groups, such as victims of Typhoon Yolanda.

As such, there is nothing that can prevent the President from undertaking executive action to address rapidly rising petroleum prices during this period of price volatility,” lawyer Terry Ridon, Infrawatch PH convenor and former House energy committee member said.

Ridon believes that the President can order the suspension of both the value-added and excise taxes on petroleum products. “With the suspension of both taxes, the public can expect an immediate 25% price reduction, assuming gasoline prices at P70/liter.”

Ridon said the suspension proposal will revert current fuel prices petroleum prices to its average price in the last four months, with generic gasoline prices ranging between P45.10/liter (Jun 22) to P45.80/liter (Aug 26) and generic diesel prices ranging between P36.5/liter (Jun 22) to P36.6/liter (Aug 26).
“This affords the public the space to prepare for graduated price adjustments in the event the suspension is lifted, when new fiscal measures are implemented to more adequately respond to price volatility in the international oil market while balancing revenue and public impact.”

The current price volatility of petroleum prices is the main justification for the President to suspend petroleum taxes, Ridon further stressed.

“From August to October, prices of petroleum products spiked between 7.02% to 15.61%. Compare this with price increases hovering only between 0.21% to 3.97% in the months of June to August. With this volatile price environment, the public cannot wait for new legislation to address problems requiring urgent solutions.”

Artemio A. Dumlao