Government ready to curb oil smuggling

By: Lawrence Agcaoili - Manila Standard

The Finance Department is set to finally implement a fuel-marking scheme to curb rampart oil smuggling in the Philippines.

Finance Undersecretary Gil Beltran said the government was now finalizing the guidelines that would pave the way for the implementation of the much delayed marking technology on the initiative of the private sector.

Beltran said the government would conduct pilot tests of the technology at the Subic Bay, Clark special economic zone and the Batangas port to ensure the payment of proper taxes.

He said the technology would help properly identify and track fuel oil products being shipped into the Philippines.

Finance officials and Bureau of Customs Commissioner Napoleon Morales met with executives of the local petroleum industry to discuss the planned marking of imported fuel.

Finance along with Customs and the Bureau of Internal Revenue in early 2005 entered into an agreement with the local petroleum industry represented by the Philippine Institute of Petroleum.

Finance Secretary Margarito Teves issued an order last year mandating the marking of imported kerosene and fuel oil products. The order was supposed to take effect on Aug. 15 last year in Subic Bay Freeport, Clark and Port of Batangas.

Estimates showed that the government was losing as much P9.5 billion in potential revenues every year due to rampant smuggling of petroleum products into the country. About P7 billion in excise tax payments and P2.5 billion in import duties are lost every year due to oil smuggling.

Beltran said the private sector had agreed to shoulder the expenses in fuel marking.

The administration of President Arroyo is at the tail-end of a fiscal consolidation program aimed at achieving a balanced budget this year, or two years earlier than the original 2010 schedule under the Medium Term Philippine Development Plan.