LPG, kerosene excise tax relief gnaws on customs collections

INQUIRER PHOTO / GRIG C. MONTEGRANDE

Duties and taxes collected by the Bureau of Customs (BOC) on kerosene and liquefied petroleum gas (LPG) imports plunged by nearly 90 percent in the week following the suspension of excise taxes on these oil products.

A BOC oil monitoring document seen by the Inquirer showed that for the April 27 to May 3 period, import volume of the two fuels had dropped 85 percent to 7,222 metric tons (MT), while duties and taxes had plunged 88 percent to P50.2 million.

This is compared with the April 20 to April 26 period—the first full week of implementation after the suspension announcement on April 17—when volume reached 49,005 MT and generated P409.3 million in duties and taxes.

For consumers, the suspension of excise taxes has reduced the price of one LPG tank by P37 and kerosene by P5.65 per liter.

“We fully support and understand the suspension of imposing the excise tax on imported kerosene and LPG,” BOC Commissioner Ariel Nepomuceno told the Inquirer.

As it is, the BOC was still able to exceed its April revenue target despite the suspension, with collections rising 15 percent year-on-year to P86.4 billion.

“Meanwhile, we just have to ensure the accurate assessment and payment of duties and taxes on nonpetroleum products. So far we are able to show encouraging results with BOC’s current remarkable collection performance,” Nepomuceno added.

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The revenue performance came as total fuel imports in April—which also include diesel, crude oil, gasoline, jet fuel and aviation gas—generated P33.7 billion in duties and taxes, up 45 percent year-on-year. Volume likewise increased 11 percent to 2.4 million MT.

Zooming out, the “import impact analysis” of the BOC showed that the persistent surge in global oil prices pushed up duties and taxes on oil imports by 31 percent to P65.2 billion from March through April, even as import volumes remained broadly stable, increasing by around 3 percent year-on-year to 4.9 million MT.

In terms of suppliers, the Philippines appeared to have shifted its top source of oil imports, with South Korea emerging as the leading supplier, accounting for 1.8 million MT as of end-April and generating P31.5 billion in duties and taxes.