Seaoil seeks new scheme before higher taxes kick in | BusinessMirror
SEAOIL Philippines urged the government to enforce a fuel-marking system before imposing higher taxes on petroleum products.
“Hopefully, before the government decides to implement a planned increase in excise tax, we could implement the fuel-marking system in which it is used in other countries to monitor smuggling activities,” Seaoil CEO Glenn Yu said.
Fuel marking involves the use of a liquid chemical substance for marking imported diesel and kerosene. In January 2014 the Department of Energy discontinued the use of chemical marker on fuel because it adopted a more practical product-quality monitor procedure through direct and indiscriminate product sampling and resting to check compliance with the Philippine National Standard.
“From an oil company’s perspective, as soon as they make a decision on fuel marking, concerns about smuggling will be addressed,” Yu added.
On the proposed adjustment in excise tax, Yu said Seaoil would abide by the law. “It’s a pass-on cost to cost for us. We will just implement what the law says.”
Based on the proposal, tax on diesel will initially be P3 per liter, and will increase to P5 on January 1, 2019, and to P6 on January 1, 2020. The same will apply to kerosene, liquefied petroleum gas and bunker oil, which is used for producing electricity.
The pending tax proposal also seeks an increase on existing taxes on other petroleum products, like gasoline, lubricating oils and grease, to P8 per liter or kilogram in 2018, P9 in 2019 and P10 in 2020.
Seaoil is the fourth-largest oil player in the country, with a market share of 5.9 percent. Yu said the oil firm has put up 400 service stations as end-June this year.
Yu added Seaoil will continue to put up 40 to 60 stations a year with an investment of at least P15 million per station.