DOE hints of another 1% tariff cut on crude imports
The Philippine Star 07/18/2006
The Department of Energy (DOE) hinted yesterday the possibility of implementing another one-percent tariff reduction on imported crude products to soften the impact on consumers of the continued rise in global oil prices.
"A one-percent tariff reduction is expected to be implemented immediately this week and further tariff reductions up to three percent maybe expected depending on the movements of prices in the world market," Energy Undersecretary and officer-in-charge Guillermo R. Balce said.
Balce said they are currently working out a scheme that would enable them to implement this short-term mitigating measure without necessarily sacrificing government revenues.
Every one percent cut in tariff on imported fuel products results in about P2.5 billion in foregone revenues for the government a month. The revenue impact would also depend on the volume of oil that the oil firms will import.
Balce said the DOE is closely monitoring developments in the global oil market.
He said they have been trying all efforts to cushion consumers from the impact of the prevailing volatility in international oil prices.
According to Balce, they are particularly zeroing in on the possible effect rising oil prices will have on the country’s inflation rate.
"The government will not cease its efforts to mitigate the impact of rising oil prices on the lives of our people as the DOE pursues its long term goal of accelerating the use of alternative sources of energy," he said.
In view of this, Balce has assured the public that prices of oil in the domestic market are expected to remain stable for the rest of July.
World oil prices hit peak levels anew, reaching almost $72 per barrel in Dubai in the past few days following continued geopolitical tensions in the Middle East.
DOE monitoring showed that Dubai crude rose to $71.99 per barrel last July 14, bringing the July average to $69.24 per barrel or up by $4.02 against the June average.
MOPS-based unleaded gasoline jumped by $2.55 to $85.31 per barrel this month compared to June average of $82.76 per barrel while MOPS-based diesel soared to $88.03 per barrel from $87.57 per barrel in June or up by $0.47.
Israel’s attack on Lebanon in response to the kidnapping of two soldiers and the firing of more than 100 rockets into northern Israel by Hezbollah guerrillas have heightened the tension in the Middle East and sent the world oil market in frenzy. Lingering tensions over Iran’s nuclear program continue to expose the world’s vulnerability to supply disruptions in the Middle East.
Consistent with the Executive Order 527 signed by President Arroyo last month, trigger prices were set as part of the guidelines for the implementation of the new EO.
Based on the guidelines, one percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and Mean of Platts Singapore (MOPS) — based diesel in the last two weeks reach $75 per barrel and $88 per barrel, respectively.
On the other hand, the two percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and MOPS — based diesel in the last two weeks reach $66 per barrel and $88 per barrel, respectively.
Zero percent tariff rates, meanwhile, shall be levied on crude and petroleum products should the average price for both Dubai crude and Mean of Platts Singapore (MOPS) — based diesel in the last two weeks reached $85.00 per barrel and $88.00 barrel respectively.
The tariff adjustments will only be implemented upon certification issued by DOE to the Department of Finance and the Bureau of Customs that the trigger prices for both crude and diesel have been met.
The guidelines, the DOE said, also impose on oil companies to reflect the corresponding reduction in pump prices of diesel fuel sold to the public transport sector.
Oil companies have been asked to provide sufficient number of gasoline stations offering the appropriate tariff-reduced diesel prices to the public transport sector.
"The government will not cease its efforts to mitigate the impact of rising oil prices on the lives of our people as the DOE pursues its long term goal of accelerating the use of alternative sources of energy," he said.
In view of this, Balce has assured the public that prices of oil in the domestic market are expected to remain stable for the rest of July.
World oil prices hit peak levels anew, reaching almost $72 per barrel in Dubai in the past few days following continued geopolitical tensions in the Middle East.
DOE monitoring showed that Dubai crude rose to $71.99 per barrel last July 14, bringing the July average to $69.24 per barrel or up by $4.02 against the June average.
MOPS-based unleaded gasoline jumped by $2.55 to $85.31 per barrel this month compared to June average of $82.76 per barrel while MOPS-based diesel soared to $88.03 per barrel from $87.57 per barrel in June or up by $0.47.
Israel’s attack on Lebanon in response to the kidnapping of two soldiers and the firing of more than 100 rockets into northern Israel by Hezbollah guerrillas have heightened the tension in the Middle East and sent the world oil market in frenzy. Lingering tensions over Iran’s nuclear program continue to expose the world’s vulnerability to supply disruptions in the Middle East.
Consistent with the Executive Order 527 signed by President Arroyo last month, trigger prices were set as part of the guidelines for the implementation of the new EO.
Based on the guidelines, one percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and Mean of Platts Singapore (MOPS)-based diesel in the last two weeks reach $75 per barrel and $88 per barrel, respectively.
On the other hand, the two percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and MOPS-based diesel in the last two weeks reach $66 per barrel and $88 per barrel, respectively.
Zero percent tariff rates, meanwhile, shall be levied on crude and petroleum products should the average price for both Dubai crude and MOPS-based diesel in the last two weeks reached $85 per barrel and $88 barrel, respectively.
The Department of Energy (DOE) hinted yesterday the possibility of implementing another one-percent tariff reduction on imported crude products to soften the impact on consumers of the continued rise in global oil prices.
"A one-percent tariff reduction is expected to be implemented immediately this week and further tariff reductions up to three percent maybe expected depending on the movements of prices in the world market," Energy Undersecretary and officer-in-charge Guillermo R. Balce said.
Balce said they are currently working out a scheme that would enable them to implement this short-term mitigating measure without necessarily sacrificing government revenues.
Every one percent cut in tariff on imported fuel products results in about P2.5 billion in foregone revenues for the government a month. The revenue impact would also depend on the volume of oil that the oil firms will import.
Balce said the DOE is closely monitoring developments in the global oil market.
He said they have been trying all efforts to cushion consumers from the impact of the prevailing volatility in international oil prices.
According to Balce, they are particularly zeroing in on the possible effect rising oil prices will have on the country’s inflation rate.
"The government will not cease its efforts to mitigate the impact of rising oil prices on the lives of our people as the DOE pursues its long term goal of accelerating the use of alternative sources of energy," he said.
In view of this, Balce has assured the public that prices of oil in the domestic market are expected to remain stable for the rest of July.
World oil prices hit peak levels anew, reaching almost $72 per barrel in Dubai in the past few days following continued geopolitical tensions in the Middle East.
DOE monitoring showed that Dubai crude rose to $71.99 per barrel last July 14, bringing the July average to $69.24 per barrel or up by $4.02 against the June average.
MOPS-based unleaded gasoline jumped by $2.55 to $85.31 per barrel this month compared to June average of $82.76 per barrel while MOPS-based diesel soared to $88.03 per barrel from $87.57 per barrel in June or up by $0.47.
Israel’s attack on Lebanon in response to the kidnapping of two soldiers and the firing of more than 100 rockets into northern Israel by Hezbollah guerrillas have heightened the tension in the Middle East and sent the world oil market in frenzy. Lingering tensions over Iran’s nuclear program continue to expose the world’s vulnerability to supply disruptions in the Middle East.
Consistent with the Executive Order 527 signed by President Arroyo last month, trigger prices were set as part of the guidelines for the implementation of the new EO.
Based on the guidelines, one percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and Mean of Platts Singapore (MOPS) — based diesel in the last two weeks reach $75 per barrel and $88 per barrel, respectively.
On the other hand, the two percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and MOPS — based diesel in the last two weeks reach $66 per barrel and $88 per barrel, respectively.
Zero percent tariff rates, meanwhile, shall be levied on crude and petroleum products should the average price for both Dubai crude and Mean of Platts Singapore (MOPS) — based diesel in the last two weeks reached $85.00 per barrel and $88.00 barrel respectively.
The tariff adjustments will only be implemented upon certification issued by DOE to the Department of Finance and the Bureau of Customs that the trigger prices for both crude and diesel have been met.
The guidelines, the DOE said, also impose on oil companies to reflect the corresponding reduction in pump prices of diesel fuel sold to the public transport sector.
Oil companies have been asked to provide sufficient number of gasoline stations offering the appropriate tariff-reduced diesel prices to the public transport sector.
"The government will not cease its efforts to mitigate the impact of rising oil prices on the lives of our people as the DOE pursues its long term goal of accelerating the use of alternative sources of energy," he said.
In view of this, Balce has assured the public that prices of oil in the domestic market are expected to remain stable for the rest of July.
World oil prices hit peak levels anew, reaching almost $72 per barrel in Dubai in the past few days following continued geopolitical tensions in the Middle East.
DOE monitoring showed that Dubai crude rose to $71.99 per barrel last July 14, bringing the July average to $69.24 per barrel or up by $4.02 against the June average.
MOPS-based unleaded gasoline jumped by $2.55 to $85.31 per barrel this month compared to June average of $82.76 per barrel while MOPS-based diesel soared to $88.03 per barrel from $87.57 per barrel in June or up by $0.47.
Israel’s attack on Lebanon in response to the kidnapping of two soldiers and the firing of more than 100 rockets into northern Israel by Hezbollah guerrillas have heightened the tension in the Middle East and sent the world oil market in frenzy. Lingering tensions over Iran’s nuclear program continue to expose the world’s vulnerability to supply disruptions in the Middle East.
Consistent with the Executive Order 527 signed by President Arroyo last month, trigger prices were set as part of the guidelines for the implementation of the new EO.
Based on the guidelines, one percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and Mean of Platts Singapore (MOPS)-based diesel in the last two weeks reach $75 per barrel and $88 per barrel, respectively.
On the other hand, the two percent tariff rates shall be imposed on crude and petroleum products should the average price of both Dubai crude and MOPS-based diesel in the last two weeks reach $66 per barrel and $88 per barrel, respectively.
Zero percent tariff rates, meanwhile, shall be levied on crude and petroleum products should the average price for both Dubai crude and MOPS-based diesel in the last two weeks reached $85 per barrel and $88 barrel, respectively.
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