Updated Dec 29, 2018, 7:52:00 PM
Metro Manila (CNN Philippines, December 29) — Department of Energy (DOE) Secretary Alfonso Cusi on Thursday reminded oil production companies to empty first their 2018 oil inventories, before applying the second round of fuel excise tax for 2019.
"The sale of old stocks, referring to the remaining balance of the inventory ending 31 December 2018, which was not covered by the second tranche of excise taxes should not be collected from the consumers," Cusi said Thursday.
Cusi warned that doing so would be a violation of the law, adding that administrative penalties such as establishment closure and "large-scale" estafa may be imposed.
"With the imposition of the additional excise taxes, we are stringently looking at the 2018 inventories of oil companies in order to protect consumers from unjust trading and profiteering once the second tranche is operationalized," he added.
The DOE, in coordination with the Department of Finance, Bureau of Customs and Bureau of Internal Revenue, said it will closely monitor existing oil inventories following the implementation of the second tranche of Tax Reform for Acceleration and Inclusion (TRAIN) law on January 1, 2019.
The TRAIN Law, which took effect in January 2018, directs an increase in the excise tax imposed on oil products from 2018 to 2020. For 2019, the excise tax on fuel products will go up by another ₱2 per liter.
The second tranche of the fuel excise tax will push through after previous recommendations from the economic managers to suspend its implementation amid rising inflation. However, Budget Secretary Benjamin Diokno said Dubai crude oil prices have since softened, prompting them to withdraw their recommendation.
READ: Duterte approves second round of fuel excise tax increase
Diokno added suspending the second tranche of the fuel excise tax will lead to ₱43.4 billion in government revenue losses.
Cusi echoed the budget chief's sentiment.
"We have to ensure the proper implementation of the second tranche of Train, because the new collection will be used to support our 'Build Build Build' programs, free tuition fee and medical assistance for our kababayans," he said.