GOVERNMENT PREPARING TO CUT OIL IMPORT TARIFFS ANEW
MANILA, JANUARY 7, 2007 (STAR) By Iris Gonzales - The government is preparing to slash tariffs anew on imported crude oil in the aftermath of the $100 per barrel oil price surge in the world market.
According to preliminary figures being considered by the Department of Energy and the Department of Finance, tariffs on imported crude oil will be slashed to two percent from three percent if the price of Dubai crude will average $78 per barrel in a month.
The tariffs would further be reduced to one percent if the average price of Dubai crude hits $91 per barrel in one month, preliminary data further showed.
Finance Secretary Margarito Teves and Energy Secretary Angelo Reyes have yet to announce the final recommendations for the tariff cuts.
Malacañang, on the other hand, appealed to critics to contribute in efforts to address the effects of rising oil prices instead of shooting down proposals.
Press Secretary Ignacio Bunye and Deputy Presidential Spokesman Anthony Golez said opposition leaders and militant groups should also make recommendations and inputs on how to stave off a possible energy crisis instead of criticizing government efforts.
The two officials made the statement in reaction to criticisms over President Arroyo’s call for an energy summit this month in the effort to come up with measures to address the effects of the latest increase in world crude prices.
“The summit is for all stakeholders and who are the stakeholders? The oil players, the oil consumers, and the different sectors that are affected by the possible oil crisis,” Bunye said.
“It’s better than not doing anything at all and we expect some positive discussions as a result of the summit,” he said.
Bunye said the purpose of the summit is to discuss all possible remedies, programs, and policies including those proposed by critics, “as well as the extent and developments in infrastructures that the President is ready to implement without sacrificing the environment.”
He said the opposition and militant groups are welcome to join the summit but “if their mindset is it will not result in anything positive, maybe their presence will be dysfunctional, especially if they think this summit will not help.”
Golez, for his part, said the phenomenon of rising prices of oil is global and the Philippine government has no control over the worldwide increase.
He said the government efforts to mitigate the effects of the rising fuel prices are aimed at benefiting the poor consumer.
As world crude prices hit the dreaded $100-per-barrel mark, President Arroyo on Friday ordered the energy and finance departments to make recommendations for a possible reduction in petroleum imports.
Slashing the tariffs would help reduce the price of pump prices and cushion the impact of skyrocketing oil prices on motorists and other consumers.
The latest tariff cut proposals are based on a peso-dollar exchange rate assumption of P42 to P45 per one dollar.
The proposed tariff cuts have been carefully crafted in such a way that the government would not incur any revenue loss.
To implement the scheme, the DOF will have to make a recommendation to the Cabinet-level Tariff and Related Matters Committee which will then forward the issue to Malacañang for approval.
The President will need to issue a new executive order to implement the scheme when Congress is in recess.
Last year, Malacañang issued Executive Order 527 which brought down the tariff on imported crude oil from three percent to two percent, a move that was aimed at helping consumers cope with rising crude prices.
Based on the guidelines of the previous EAU, a one percent tariff was imposed on crude and petroleum products should the average price of both Dubai crude and diesel over a two-week period reach $75 per barrel and $88.00 per barrel, respectively.
On the other hand, the two percent tariff was imposed on crude and petroleum products pegged on the average price of both Dubai crude and diesel reaching $66 per barrel and $88 per barrel.
A zero percent tariff was levied, on the other hand, on crude and petroleum products on the basis of the average price for both Dubai crude and diesel maintaining at $85 and $88 per barrel. -With Paolo Romero
Chief News Editor: Sol Jose Vanzi
© Copyright, 2007
by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved
PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE