The Department of Energy (DOE) on Wednesday said it recorded a continued downtrend in global oil prices, which pushed down pump prices in the Philippines for the fourth consecutive week.
In the weekly economic briefing in Malacañang, Energy Secretary Alfonso Cusi noted that the fall of oil prices in the country was triggered by several factors in the global market.
“We recorded four consecutive weeks of decreases for oil prices at the pump. The fall in the prices in the Philippines is reflective of movements in the global market,” Cusi said.
The Energy official said among the factors that help pushed down fuel prices in the Philippines were the rise in production of the Organization of Petroleum Exporting Countries (OPEC) and the “softening” of US’ economic sanction against Iran.
“In October, OPEC production rose to its highest level in almost 2 years as higher output from Saudi Arabia, Libya and the UAE pushed production up to 390,000 barrels per day,” Cusi said.
“Additionally, oil prices fell this week as the start to US sanction against Iran’s fuel export was softened by waivers that will allow eight major importers to continue buying Iranian crude,” he added.
Despite this downward trend in prices, the Energy chief said the government will take measures to mitigate short to medium term volatility as markets continue to adjust to these developments.
Excise tax suspension stands
Although the DOE claimed that the oil prices will continue to go down, the Department of Finance (DOF) insisted that the recommendation to suspend the next round of fuel excise tax next year “still stands.”
“The economic managers submitted their recommendation to suspend the next tranche of the increase in excise scheduled for January 2019. That recommendation stands,” DOF Assistant Secretary Tony Lambino said during the briefing.
“The recommendation stands because when it was made the price was above the threshold, above $80 per barrel,” he added.
The next increase in the excise tax on fuel will be suspended when the average Dubai crude price for three consecutive months before the next increase reaches or exceeds $80 per barrel, according to the Tax Reform Acceleration and Inclusion (Train) law.
Fuel excise taxes increased by P2.5 per liter this year, and the levy is scheduled to rise by P2 and P1.5 per liter in 2019 and 2020, respectively, for a total P6 excise tax hike for three years.
Calls for the suspension of the excise tax on fuel products piled up as prices of prime commodities soar. /ee