Oil firms want fuel marking done in terminals, refineries only

June 24,2019

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MEMBER companies of the Philippine Institute of Petroleum (PIP) want fuel marking on their products be done in certain venues only.

The group expressed this in a position paper submitted to the Department of Finance (DoF) regarding the proposed guidelines that will pave the way for the implementation of the country’s fuel marking program, the Philippine Daily Inquirer said in a report published Monday.

“To ensure uniformity of application, fuel marking should only be allowed in import terminal and refineries. Certification of marked fuels should be done on receiving tank [for import terminal] and on finished product tank [for refinery],” the PIP said in the position paper.

Member companies of the PIP are Chevron Philippines, Inc., Isla LPG Corp., Petron Corp., Pilipinas Shell Petroleum Corp., PTT Philippines Corp. and Total Philippines Corp.

The report quoted the industry group as saying that while its members support the government’s initiative to curb smuggling, they want “minimal disruptions within the oil companies’ facilities.”

Early this month, the DOF presented for public consultation the draft joint circular it would issue together with the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) to fully implement fuel marking nationwide, according to the report.

It noted that under the draft rules, field testing can be conducted in refineries, gasoline stations and other retail outlets under BIR supervision. The BoC will supervise testing in depots, tank trucks, vessels, warehouses and other fuel-transporting vehicles.

The PIP listed implementation concerns during pre-, actual and post-fuel marking activities. According to the report, the group said it also wants representatives of its member-companies to serve as witnesses during the fuel marking.

The government’s fuel marking program requires petroleum products refined, manufactured, or imported into the Philippines to undergo the process after the taxes and duties for these products have been paid. The program was scheduled to be implemented earlier this year, but has been repeatedly pushed back. The program intends to plug revenue losses from uncollected excise taxes and value-added tax due to oil smuggling and misdeclaration.

In previous statements the DoF said it expects to raise P20 billion to P40 billion in revenue from lost import duties. Estimates by the Asian Development Bank (ADB) put tax revenue losses from oil smuggling at P37.5 billion yearly.

The ADB on its website said a “robust fuel-marking program provides a government with a comprehensive approach that analyzes each stage of the supply chain, beginning with the country’s refineries or fuel depots, and extending to the eventual sale of fuel products at the retail level.”

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