CALLS for the suspension on the implementation of the second tranche of additional excise taxes on fuel products continued to snowball as a lawmaker believed that doing so would ease the impact of rising prices on consumers.
The government has to rein in inflation for the fourth quarter and into next year to stem the further deterioration of consumer purchasing power and mitigate the impact of high prices especially on the poor,” Quezon City Rep. Winston ‘Winnie’ Castelo said.
Citing international projections, Castelo noted that oil prices are expected to hit $90 per barrel and $100 in 2019.
Reports earlier said oil prices could rise towards $100 per barrel by 2019 as US sanctions against Iran tighten markets, citing forecasts by commodity merchants Trafigura and Mercuria at the annual Asia Pacific Petroleum Conference (APPEC) in Singapore.
Almost 2 million barrels per day (bpd) of crude could be taken out of the market as a result of the US sanctions against Iran by the end of the fourth quarter this year, said Daniel Jaeggi, president of commodity merchant Mercuria Energy Trading, making crude price spike to $100 a barrel possible.
Ben Luckock, co-head of oil trading at fellow merchant Trafigura said crude oil prices could rise to $90 per barrel by Christmas and to $100 by the New Year as markets tighten.
Castelo said higher demand because of winter in the West could further compound the supply imbalance.
He noted that under the TRAIN Law, “the scheduled increase in the excise tax on fuel as imposed in this section shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS) for three months prior to the scheduled increase of the month reaches or exceeds $80 per barrel.”
Under the TRAIN Law, an excise tax of P2.50 per liter was imposed on diesel and bunker fuel starting this year. This would go up to P4.50 in 2019 and P6 in 2020.
The excise tax on gasoline increased from P4.35 per liter to P7 this year and will go up to P9 in 2019, and P10 in 2020.
“We should hold imposing the additional excise tax of two pesos on gasoline, diesel and bunker fuel in January,” Castelo said.
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