P7 per liter hike for diesel in 2020 if TRAIN law isn’t stopped — Bayan Muna

MANILA, Philippines – Rate hikes for diesel fuel may reach up to P7 per liter if the third tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) law is not repealed, party-list group Bayan Muna warned on Monday.

Bayan Muna Reps. Carlos Zarate and Ferdinand Gaite said that this amount is derived from the impending price hikes and the excise tax on fuel as mandated by the TRAIN law, which was signed by President Rodrigo Duterte in 2017.

“Worse, considering the shift to diesel by tankers transporting oil products, an additional P5-P10 more, based on DOE (Department of Energy) computations, will be added to diesel prices per liter. This means, we will have a whopping P7 per liter increase in diesel alone,” Zarate said in a statement.

“This would have a tremendous effect on the prices of basic goods as well as transportation fares and may be worse than the price shocks we experienced in 2018,” he added.

Under the TRAIN law’s third tranche, diesel prices would go up by P1.50 per liter in 2020.  Gasoline fuel increases, on the other hand, would be at P1.85 per liter, kerosene at P1.35 per liter higher, and bunker fuel and petroleum coke by P1.50.

Zarate also cast doubt on whether oil companies would heed the DOE policy to consume their old stocks first before selling fuel at a higher price due to the excise taxes.

He claimed that this problem would have been solved if only the unbundling of oil prices — that is, publicizing the breakdown of fuel prices — was only implemented.

READ: Bayan Muna mulls suing DOE execs for inaction on high fuel prices

“Even if the DOE 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,” Zarate explained.

“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,” he added.

Gaite meanwhile warned that the high increases may be the cause of high prices of goods, which translate to high inflation rates.  If such scenario ensues, he claimed that the supposed low inflation rates for 2019 would only be negated.

“Since the record high surge in prices in basic goods in 2018, prices have not gone down and it has nowhere to go but up because of the last tranche of TRAIN Law 1,” the lawmaker noted.  “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.”

“Again if the administration wants to shield consumers from the upcoming price onslaught then it should immediately repeal the TRAIN law,” he dared.

The TRAIN law was signed by Duterte last December 2017, who said that it was the best Christmas gift for the Filipino people.  The measure was seen as a source of funds for the administration’s infrastructure project.

While the law featured several reprieves such as income tax exemptions for people earning less than P35,000 per month, it was also a source of criticism for opposition groups as they believed it spurred high inflation rates in 2018, especially in September and October where it reached a nine-year record of 6.7 percent.

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