DOE to prevent abuse of oil pricing due to TRAIN Law

As the implementation of the second tranche of the TRAIN Law for petroleum products took effect starting Jan. 1, the Dept. of Energy Monday assured the public it has taken measures to prevent abuse and ensure fair and effective implementation of the taxation scheme.

“The Department of Energy is mandated to ensure that the pricing of oil products is carried out within the parameters of the TRAIN Law,” Energy Secretary Alfonso G. Cusi said in a statement.

He added, "Over the process of the implementation of the first tranche of the TRAIN Law, we have reached out to our stakeholders, especially the oil companies for their cooperation and we will continue our coordination with them throughout the second tranche. 

He stressed that the DOE will be even more vigilant in monitoring the implementation of the second tranche of the TRAIN Law for petroleum products.

“We will ensure the fuel stocks for 2018 will be utilized first and sold at the pre-implementation prices,” Sec. Cusi said.

As a result of its stringent monitoring operation, the Department has already asked several gas stations to explain why they implemented fuel price hikes as early as 2 January 2019.

Under the second tranche of TRAIN Law's implementation, an additional excise tax of P2.00 will be imposed per liter of diesel and gasoline, and P1.00 per kilogram on Household LPG. There will also be an additional 12 percent value added tax, which totals to P2.24 for both diesel and gasoline, and P1.12 for LPG.

However, the DOE pointed out that the increase in pump prices of petroleum products resulting from the imposition of the second tranche of fuel excise tax will still be smaller. This is due to the offsetting effect of the rollbacks implemented in 2018 and January 2019.

While there is an uptick in the price of oil in the world market, Sec. Cusi pointed out that industry forecasts do not see crude oil prices hitting record high prices, such as in October 2018 when Brent crude oil price breached the $80 per barrel level.

“If the trend continues, we do not expect it to have as much impact on fuel prices as it did last year. Besides, we can cushion the effect of any new oil price increases by becoming more efficient in our use of energy,” he said.

Through its E-Power Mo movement, the DOE has been providing the public with tips for an energy-efficient lifestyle, particularly in the use of fuel and electricity.

"We might have to spend a little more, but that little sacrifice would translate to huge benefits for the country,” the energy chief emphasized.

“Let us remember that the revenues from TRAIN will fund important programs, such as free education, increase in the salaries of our public school teachers, as well as crucial infrastructures under the ‘Build, Build, Build program. All these would sustain our economic growth towards Ambisyon 2040 by providing more jobs and livelihood opportunities for our people,” Sec. Cusi said.