No oil rollback due to tariff hike
Manila Times, Jan. 6, 2005
CONSUMERS should not expect an oil price rollback despite a downtrend in global oil prices late last year because of a 2-percent increase in the import duty on all petroleum products starting this month.
Energy Secretary Vincent S. Perez said on Wednesday that local oil prices will remain at current levels.
Monitoring by the Department of Energy showed that Dubai crude averaged at $34.20 a barrel last month from $34.87 in November.
The Mean of Platts Singapore (MOPS)-based unleaded gasoline went down to $44.81 in December from $52.45 in November, while MOPS-based diesel dropped to $51.33 last month from $56.82 a barrel during the same period.
“Our computations show that an increase in import tariff, which is equivalent to an average P0.36 to P0.38 a liter, will hardly be felt by consumers as we saw world oil prices falling sharply last month,” Perez said.
He said if prices continue at present levels, it is even possible to see another round of price rollback “within the month,” most probably gasoline prices.
Effective this month, imported crude and all refined petroleum products, except liquefied petroleum gas, will be levied a 5-percent import duty, from the earlier levy of 3 percent.
Perez said the government is expected to raise additional revenues of about P5.5 billion annually from the tariff increase.
The adjustment in import duty is intended as an interim revenue measure until Congress passes the draft bill on new taxes for petroleum products. The proposed tax measures form part of the government’s fiscal road map to arrest the country’s budget deficit.
Perez also said existing oil inventories built up in major international oil markets will likely remain at current price levels in the first few months of the year.
“We saw oil prices reaching record levels, prompting the energy department to call on the public to conserve fuel. We are very pleased that the public heeded it,” he said.
Perez hopes that oil prices will continue this downward trend in the coming months.
The department’s monitoring of energy analysts’ forecasts worldwide show international oil prices to remain at above $30 a barrel for Dubai crude, Asia’s benchmark, in the first five months of the month.
New York-based PIRA Energy Group said Dubai crude in January will average up to $36 to $33 in May.
Given high inventories, combined with the reported slowdown in economic growth compared with the previous years in countries such as China and Japan, analysts said the sharp increase in prices seen last year is unlikely.
CONSUMERS should not expect an oil price rollback despite a downtrend in global oil prices late last year because of a 2-percent increase in the import duty on all petroleum products starting this month.
Energy Secretary Vincent S. Perez said on Wednesday that local oil prices will remain at current levels.
Monitoring by the Department of Energy showed that Dubai crude averaged at $34.20 a barrel last month from $34.87 in November.
The Mean of Platts Singapore (MOPS)-based unleaded gasoline went down to $44.81 in December from $52.45 in November, while MOPS-based diesel dropped to $51.33 last month from $56.82 a barrel during the same period.
“Our computations show that an increase in import tariff, which is equivalent to an average P0.36 to P0.38 a liter, will hardly be felt by consumers as we saw world oil prices falling sharply last month,” Perez said.
He said if prices continue at present levels, it is even possible to see another round of price rollback “within the month,” most probably gasoline prices.
Effective this month, imported crude and all refined petroleum products, except liquefied petroleum gas, will be levied a 5-percent import duty, from the earlier levy of 3 percent.
Perez said the government is expected to raise additional revenues of about P5.5 billion annually from the tariff increase.
The adjustment in import duty is intended as an interim revenue measure until Congress passes the draft bill on new taxes for petroleum products. The proposed tax measures form part of the government’s fiscal road map to arrest the country’s budget deficit.
Perez also said existing oil inventories built up in major international oil markets will likely remain at current price levels in the first few months of the year.
“We saw oil prices reaching record levels, prompting the energy department to call on the public to conserve fuel. We are very pleased that the public heeded it,” he said.
Perez hopes that oil prices will continue this downward trend in the coming months.
The department’s monitoring of energy analysts’ forecasts worldwide show international oil prices to remain at above $30 a barrel for Dubai crude, Asia’s benchmark, in the first five months of the month.
New York-based PIRA Energy Group said Dubai crude in January will average up to $36 to $33 in May.
Given high inventories, combined with the reported slowdown in economic growth compared with the previous years in countries such as China and Japan, analysts said the sharp increase in prices seen last year is unlikely.
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